Dylan Becker

Matthew Busch
Sophia Fried
Gwyn Gordon
Connor Morrison
Kelsey Spelts

BMW Group | Team 74

Eller College of Management
Marketing Group Leader: Dylan Becker

Professor Lilian Almeida

Marketing 361
11 October 2021
Organization Description
Bayerische Motoren Werke (BMW) is an automotive company headquartered in Munich,
Germany. It manufactures and sells cars, off-roading vehicles, and motorcycles. They own MINI
and Rolls-Royce and also manufacture spare parts and other car accessories.

Their mission statement is: “To become the world’s leading provider of premium products and
premium services for individual mobility” (BMW Group, 2021) The BMW Group has adopted
Strategy Number ONE. It includes four pillars, which are: “Growth,” “Shaping the future,”
“Profitability,” and “Access to technology and customers” (ibid). The BMW tagline is “The
Ultimate Driving Machine.”

Strategy Number ONE accurately describes what the BMW Group strives to achieve. They are
well-known for their luxury vehicles, and the four pillars highlight their motives to grow as a
company while benefiting society and the environment. “The Ultimate Driving Machine” has
been their tagline for many years, however the company doesn’t deliver on this promise
anymore. BMW has come under criticism for their vehicles’ unreliability in recent years.
Customers are frustrated with their cars that keep needing maintenance, and since parts have to
be shipped from Germany, it takes a long time for them to get their cars back. In order to more
clearly communicate what BMW is to customers, they should pick a tagline that lines up more
with their mission statement. For example, “Individual Mobility for Every Driver.”

BMW’s core business is creating high-class vehicles and providing services for these vehicles at
dealerships. They value their independence as a company and strive to offer thrill for those who
drive their cars. They largely focus on meeting the varying needs of their customers around the
world. Cooperation is important to them, so they work closely with their internal and external
partners to maintain ultimate effectiveness.

Market Description
The BMW Group is a luxury car company that concentrates its marketing efforts on successful
business professionals; in terms of consumer behavior, this niche market makes purchase
decisions in alignment with perceived social status. Within this broader consumer group, BMW
narrows its target market focus on the basis of gender, generational values, socioeconomic status,
consumer behavior, and culture (Mintel, 2021). BMW tailors its products to exude class in
alignment with its mission statement. BMW’s recent market efforts have been increasingly
oriented around younger professionals, diverting the target market away from older business
professionals, which previously constituted the majority of BMW’s sales; this is a response to a
larger shift surrounding the age demographics of luxury car companies affecting all aspects of
BMW’s marketing mix: price, product, promotion, and place.

As luxury car companies are “becoming more tech-forward and migrating away from traditional
luxury,” their associated target demographic has experienced an average decline in age. The
most significant percentage of BMW consumers are individuals aged 35 - 50; specifically, the
25-54 year age group accounts for 40% of BMW owners as of 2020 (Hedges & Company). The
shift in age demographics can be attributed to changing lifestyle preferences, as many young
consumers increasingly establish social rapport with material goods. This emerging target market
of young business professionals aligns with BMW’s media presence in high-profile, action
movies such as James Bond films. BMW’s simple core slogans align with BMW’s promotion
strategy to resonate with younger audiences. BMW’s average consumer is categorized into “high
household income, as business professionals constitute BMW’s target market; while the average
income of the US population as of 2021 is $79900, the average BMW buyer has an average
household income of $124,800 as of 2020. According to the University of Wisconsin-Madison,
high-income households “above $100,000 comprise one of the fastest-growing segments of the
U.S. population”; recent data reflects that this segment has experienced an annual 2% increase
since 2000 (University of Wisconsin, 2021). From consumer reports, men show a larger
likelihood of valuing automobiles, “with high-end technology and stylish looks for both interior
and exterior” (Hedges & Company, 2021). New data shows that 64% of new BMW owners are
male, while females constitute the remaining 36% of new BMW owners (ibid).

Thoroughly considering their variety of consumer preferences, BMW offers a vast product array
of 80+ car models and 15+ motorcycle models. Their expansive model selection takes myriad
consumer lifestyles into account; the BMW X5 SUV targets a family-oriented demographic that
holds stronger value on leisure time, while the BMW M3 offers “peak performance for sport-
minded driver[s]” (BMW USA, 2021). BMW utilizes a differentiated price strategy, meaning
that the prices of their vehicles are dependent on the quality of materials used; BMW curates its
models per its differentiated price strategy (Fenton, 2021).

BMW operates globally, with production and assembly facilities in 15 different countries; with
their global presence comes increased expectations surrounding corporate social responsibility.
Although operations are limited to 15 core countries, BMW “has a global sales network in more
than 140 countries” (BMW Group, 2021). Across BMW’s global sales network, Europe and
North America produce “more than 70% of BMW’s car sales” (Mintel, 2020). BMW has
redirected its focus to expanding its line of electric vehicles, in response to increasing societal
value on corporate social responsibility (Fenton, 2021).

Competition Description
BMW’s main competitors are luxury automotive companies that offer a high-quality,
comfortable vehicle providing more than transportation from point A to point B. Within the
BMW Group alone, there are three different brands including BMW, Mini, & Rolls Royce that
are all high-end manufacturers owned by the corporation. BMW’s two biggest competitors, Audi
and Mercedes, have very similar company values and goals as the BMW Group. While other
competitors like Jaguar, Volvo, Lexus, Honda, Range Rover, Toyota, Dodge, and Jeep all have
very differently shaped morals and ethics. BMW separates itself as a luxury automotive brand by
having a unique set of company values (Mintel, 2021).

The core of BMW’s competitive strategy is to have “continuous process improvement &
technological advancement in its R & D '' (Forbes, 2021). Because of this, BMW has a slight
competitive advantage over car manufacturers that don't offer an all-electric vehicle. While other
car producers aren’t focusing on the future to the extent that they should be, BMW’s two biggest
competitors, Audi and Mercedes, are strategizing to become fully electric in the future. In a
recent Forbes article about the Best Luxury Cars For 2021, it stated that the 2021 BMW 5 Series
was ranked third behind the 2021 Mercedes-Benz S-Class and the 2021 Audi A8 (Forbes, 2021).
BMW consistently falls short to Audi and Mercedes, who have both proven time again to be the
companies biggest rivals.

Audi’s mission statement focuses on innovation and Mercedes’ slogan “The Best OR Nothing”,
makes it clear that they both are striving to become the number one automotive company with
the transition to EV (Greentech Lead, 2021). Mercedes-Benz and Audi are both producers of
luxury cars and manufacturers of commercial vehicles that have global reach. While BMW has a
global presence, they aren't producing vehicles as fast and with as good of quality as Mercedes
and Audi are. Audi and Mercedes-Benz, have continuously proven by strategizing that they're
willing to do whatever it takes to outperform BMW as a competitor.

Strategic Analysis
 References

Best Luxury Cars For 2021. (2021). Forbes. https://www.forbes.com/wheels/best/luxury-cars/

Bhasin, H., & Zethembe. (2018, September). Marketing strategy of BMW - BMW Marketing
strategy. Marketing91. https://www.marketing91.com/marketing-strategy-bmw/.

BMW Group. (2021). BMW Corporate Strategy.

https://www.bmwgroup.com/en/company/strategy.html

BMW Group. (2021). Chronology. Defining moments in the history of the BMW Group.
https://www.bmwgroup.com/en/company/history.html

Demographics & Lifestyle Analysis. (2021). Downtown Market Analysis.

https://fyi.extension.wisc.edu/downtown-market-analysis/understanding-the-
market/demographics-and-lifestyle-analysis/.

Dow Jones & Company. (2021). BMW.XE | Bayerische Motoren Werke AG Company Profile &
Executives. Wall Street Journal. https://www.wsj.com/market-
data/quotes/XE/XETR/BMW/company-people

EV market share of Tesla, Volkswagen, SGMW, BMW, Stellantis. (2021). Greentech Lead.

Fenton, Susan. (2021, January). BMW aims to double fully-electric vehicle sales in 2021.
Reuters.https://www.reuters.com/article/us-autos-bmw-electric/bmw-aims-to-double-
fully-electric-vehicle-sales-in-2021-idUSKBN29K1CI.

New BMW Owner Demographics: Income, Age, Gender And More. (2021, June).
Hedges & Company. https://hedgescompany.com/blog/2019/03/new-bmw-owner-
demographics/.

New sales and marketing strategy: BMW Group optimistic about 2021 after posting record Q4
sales &nbsp. (2021). BMW Group PressClub.
https://www.press.bmwgroup.com/global/article/detail/T0324289EN/new-sales-and-
marketing-strategy:-bmw-group-optimistic-about-2021-after-posting-record-q4-sales-.

Positioning & target consumers - BMW12. Google Sites.

https://sites.google.com/site/bmwgmx12/home/1-signals-of-change/positioning-tar.
 Appendix

Market Description
Aligning with their goal to “increase sales of [our] electrified vehicles by more than half in
2021”, they have expanded their electric product line with hopes of “doubling the number of
electric vehicles offered by 2023” (BMW Group, 2021). While the 3 series retails on average
from $37,025 - $49,800, the 5 series generally retails from $42,775 - $65,075 due to subtle
improvements in the aspects of design and performance. The main distinction between the 5
series and 3 series is interior space and storage, as well as engine power; the 5 series appeals to
BMW’s niche of buyers that value interior space (BMW USA, 2021). BMW’s recent industry
expansion efforts have been centralized around their electric flight of automotive models
(Fenton, 2021). BMW currently ranks fourth in its share of the worldwide electric vehicle
industry, dominating 6% of the worldwide EV market share (Greentech Lead, 2021). 63% of
consumers aged 25-34 emphasize a preference for standing out from the crowd, while 71% of
this consumer group also “prefer to be associated with brands that align with their values”; these
trends explain why young business professionals increasingly gravitate towards luxury vehicles
(Mintel, 2020).