Dual Award Programme

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Name of module: Principles of Marketing

M K T 6 0 1 0 4
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1.0 Executive Summary (100-150)

2.0 Introduction

BMW was founded in 1917 as a subsidiary of Rapp-Motorenwerke in Munich. They are a

German multinational company that specializes in luxury vehicles. The business was

reorganized as BMW AG in 1922 after being merged with Knorr-Bremse AG in 1920. It

 was the 1916-founded Bayerische Flugzeugwerke AG's replacement. For their 20th

anniversary in Malaysia, BMW Group Malaysia became the top premium electric vehicle

provider, delivering over 3,600 electric vehicles. Their mission and future direction is

they aspire to be the most successful, sustainable, premium manufacturer for individual

mobility. According to the chairman of BMW AG, he said “they aim to extend our

leading position in resource efficiency in production to the entire life of our vehicles. The

New Class is the latest large stride in this process.

3.0 The Product Line

The product I am focusing on is their Hybrid series, the BMW 7 Series 740Le x Drive

4DR Auto, and their luxury sedan.

4.0

4.1 Strengths

4.1.1 BMW’s loyal fanbase and strong reputation

 Maintaining its dominant position in the European luxury car market,

BMW outperforms rival German automakers Mercedes-Benz and

Audi. Owners of BMWs are remarkably devoted, with many opting to

continue with the brand when buying a new car, according to

Cartelligent (European CEO, n.d.). Their remarkable online presence,

which includes being the first carmaker in the world to amass more

than one million Instagram followers, is a testament to their

unwavering devotion to their customers. Beyond social media, BMW

stands out for its dedication to providing exceptional after-sale

customer care. There is a lot of recurring business as a result of this

emphasis on guaranteeing consumer pleasure. Because they were so

pleased with their purchase, existing customers are more likely to

return as BMWs enjoy a solid market position and a devoted

following.

4.1.2 Good quality engineering

Another one of their strengths would be their good quality engineering.

Today, BMWs are considered moderately reliable due to their

advanced technology. They present excellent safety ratings, good fuel

efficiency, and a range of luxurious features. The following aspects

that support BMW’s stability are its dependability. According to FINN

(2023), they have won several awards from JD Power for their quality,

dependability, and performance. For instance, the BMW X6 won best

performance for midsize premium SUV in 2022 and the BMW 7 series

won highest quality large premium car. In accordance to BMW of

 Greensboro (n.d), BMWs are staggering due to their sturdy engines

that expertly balance power and efficiency. These engines are

accurately calibrated to offer remarkable acceleration, top speed, and

excellent fuel efficiency.

4.1.3 Good resale value

Lastly, they have a good resale value. According to JD Power (2022),

based on the consumer rating they have gotten from verified BMW car

owners. They forecasted a 67 out of 100, the rating score is slightly

above average as it is not remarkable but also not poor. It falls

somewhere between the middle range.

According to BMW (n.d), their automobiles are renowned for having

exceptional resale value. Owing to the brand's renown for excellence,

robustness, and longevity, a BMW automobile holds a substantial

amount of its original cost even after many years of operation. This

implies that you should receive a respectable return on your investment

when the time comes to sell your BMW. Industry evaluations and

research frequently rank BMW as one of the best brands in terms of

resale value. For example, the BMW X series is one of the best at

holding onto its value over time. The trust and assurance that buyers

have in BMW vehicles across the globe is demonstrated by their resale

value.
4.2 Weakness

4.2.1 The manufacturing process emits lots of greenhouse gases and still

emits CO2.

The manufacturing process emits a lot of greenhouse gases & it still

emits CO2. They market it as a sustainable alternative to petrol cars,

but it still emits CO2 and can pollute the environment due to the petrol

counterpart. The battery is made out of rare metals that are difficult to

source and during sourcing, harm the environment (YPT, n.d.). The

battery is a combination of metals such as lithium, cobalt, and nickel

that is difficult to extract without damaging the environment. The

entire process from extracting, processing, and transporting the raw

materials has serious environmental impacts. Earth.org (2023), states

that the environmental cost of mining these elements is significant,

which means that the process of making an electric vehicle (EV)

requires more energy than that of an internal combustion engine (ICE)

vehicle. The production of batteries has an environmental impact

because of the water-intensive nature of the process and the hazardous

fumes emitted during mining.

4.2.2 Battery Degradation

Another one of their weaknesses is battery degradation. Firstly, it is a

huge investment to get a battery replacement for a hybrid car, for

example, an Audi A6 Hybrid, which costs about RM48,000 in 2019.

 Furthermore, the battery degrades over time. They can degrade faster

than the period stated by manufacturers. Consumer Auto (n.d) reports

that high temperatures shorten the battery life of hybrid vehicles by

accelerating chemical reactions inside the battery cell and increasing

deterioration. There’s also the risk of overheating which can damage

the battery pack as exposure to high temperatures can decrease the

battery's lifespan. The battery is severely impacted by other factors

such as aggressive driving, where frequent stopping and fast

acceleration will damage the battery and cause early degradation.

4.2.3 Their Hybrid cars have low range.

Lastly, they have a low range. The fully electric range is very small;

thus, it does not offer a significant advantage over internal combustion

engines (ICE). According to Autoblog (2023), hybrids require regular

charging for everyday journeys, its low electric range decreases the

advantage over conventional internal combustion engines and makes it

not effective to use for longer excursions. So, even though the hybrid

has certain advantages, the short electric range is still a major

disadvantage in terms of practicality and overall efficiency. With this

model, you can drive up to 46 km purely on electric power, with

driving speeds at 140km/h, thus a suitable option for short commutes

(Evo Malaysia, 2019). The top speed for the petrol engine is 250km/h.

However, if you were to drive the car at max speed with the battery its

electric power consumption combined being 19.5 kWh/100km. At a

 top speed of 140km/h, the car’s electric motor can drive for

approximately 20 minutes before needing to recharge.

4.3 Opportunities

4.3.1 Government initiatives

The government can begin implementing future policies to encourage

the use of HEVs by reducing non-tariff barriers, providing incentives,

and investing in infrastructure. As per Paultan.org (2024), the market

for electric and hybrid vehicles is expected to liberalize after 2025,

which will result in a notable rise in the adoption rate of these vehicles.

Therefore, government initiatives will be critical in encouraging the

use of HEVs and attaining greater adoption rates (Rajoo et.al, 2021) .

The Malaysian government has understood that Green technology has

vast potential for innovation and renewal and that it is essential to

economic prosperity (UNESCAP, 2018). Regarding the use and

promotion of Green Technology in the transportation industry, the

Malaysian government has offered significant incentives for hybrid

 vehicles. They were often subject to import duty, excise duty, and sales

tax ranging from 10% to 80%. The Malaysian government provides

special incentives for hybrid car dealers. Specifically, the government

waives the entire import fee and 50% of the excise fee for new fully

built hybrid vehicles. These incentives are part of the government’s

efforts to promote environmentally friendly technology.

4.3.2 The global demand for hybrid and electric cars are increasing.

Customers' need to drive more sustainably is pushing up demand for

electric and hybrid vehicles worldwide. Consumers are beginning to

view hybrid cars as practical solutions for lowering their carbon impact

as awareness of their advantages increases. According to the National

Association of Convenience Stores (NACS, 2024), the study they

made states that consumers in the convenience and fuel retail sectors

not only seek but also increasingly expect sustainable and eco-friendly

alternatives. The survey they made shows that consumers are willing to

pay more for sustainable products. Relating to the same study, 71% of

consumers in the U.S. would choose a product that follows eco-

friendly practices. In 2024, research indicated that 80% of consumers

are either very or somewhat worried about the environmental impact of

the products they purchase, which is an increase from 66% in 2022 to

68% in 2023. However, compared to the U.S., Malaysia has had much

less success in promoting hybrid electric vehicles among its citizens.

According to the Vulcan (2023), due to the high cost and lack of

subsidies, an example would be an Audi Q5 with its starting price at

 RM390,000. Making the adoption of hybrid vehicles nearly impossible

for the average middle-class Malaysian citizen.

4.3.3 Expanding their customer base in China

Given that China usually leads the globe in innovations and fashion,

there are many prospects to grow BMW's consumer base there. Essec

Business School (2016) claims that China's rapid advancements in

autonomous driving technology and the rapid rise of electric vehicles

have had an impact on global automotive markets and policies. BMW

has tremendous potential in China due to the country’s enormous

consumer base, growing middle class, and strong demand for premium

and luxury automobiles (China Daily, 2021). Furthermore, China’s

emphasis on sustainability fits perfectly with BMW's objective to

create and market electric and hybrid cars. Making China a viable and

suitable option for market expansion.

4.4 Threats

4.4.1 Competition with other manufacturers.

One of the biggest threats BMW faces is from its competitors with

other manufacturers. Two of their biggest competitors are Audi and

Aston Martin (MBA Skool, n.d.). It has been one of BMW’s main

competitors as they are a German company that has been in the luxury

car industry since 1932. In the automotive industry, Audi has made a

name for itself as a reliable and desirable brand over the years.

Focusing primarily on developing cars for the substantial global

 market for premium automobiles. When doing an in-depth review

(Audi Cincinnati East, n.d.), Audi appears to be the better brand after

winning consumer’s trust by offering the best features for an affordable

price. Audi believes you should pay less for more, whereas BMW

wants you to spend more for less. Aston Martin on the other hand was

established in 1913 and is a renowned premium automobile brand from

the UK. They are extremely exclusive to its buyers as they have only

sold about 70,000 cars in its history which makes them a big

competitor against BMW.

4.4.2 The economic factors affecting consumer buying habits.

Many things affect consumer’s buying habits, including economic

factors (Chais, n.d. ). The decision to buy a vehicle is usually

influenced by household income and disposable cash. During times of

economic growth, people are more likely to invest in a new or updated

car because they feel more secure about their financial situation. On

the other hand, during recessions, disposable income drops, which

encourages frugal spending and increases demand for reasonably

priced cars. Decisions about purchasing a car are also significantly

influenced by the availability of credit and current interest rates. While

high interest rates may discourage people from taking out loans for the

purchase of an automobile, low rates may encourage them to do so. If

customers can even get the money required for the cars they want, it

also depends on the availability of their credit.

4.4.3 The dangers of the battery pack and gasoline tank.

 Lastly, there are dangers regarding the battery pack and gasoline tank

(OJP, n.d.) A hybrid car offers double the fuel efficiency of a standard

car by combining an internal combustion engine from a conventional

car with an electric motor and battery from an electric vehicle. There

are some particular challenges and risks if they are involved in

accidents. To guarantee safety, first responders must be aware of how

hybrid vehicles work, the safety issues, and appropriate safety

measures. In a motor vehicle accident, all hybrid vehicles have safety

features intended to immediately separate the high voltage at the

battery pack to prevent injuries. Even with these safety precautions,

many things can happen if the safety feature doesn’t work—things like

an electric shock due to the high voltage components. Anyone

contacting the car in an accident, including the first respondents, could

be exposed to hazardous electrical currents in the absence of sufficient

insulation and automatic disconnection.

5.0 Recommendations

5.1 For the manufacturing and sourcing of the battery.

Since the manufacturing and sourcing of the battery is harmful to the

environment, I would suggest more ethical mining practices since brine mining is

a common method of mining lithium that includes removing the metal from

subterranean saltwater sources (Earth.org, 2023). The danger lies in contaminating

nearby water sources. To extract lithium and other minerals, salt water is pumped

to the surface and allowed to evaporate. Even though it uses a lot of energy, this is

still one of the most economical ways to harvest lithium today. Unfortunately, the
 biodiversity of animals and humans is threatened by these harmful metals that

poison water sources. To make the cobalt and lithium mining operations more

environmentally friendly and sustainable, one way to reduce the energy intensity

of these activities is by implementing energy-efficient technologies. This may

lessen greenhouse gas and pollution emissions. Furthermore, better recycling and

waste management techniques might lessen the negative environmental effects of

cobalt mining. Relying on renewable energy sources to power operations, putting

in place energy-efficient machinery and equipment, and improving energy

practices are some ways that energy-efficient technologies can reduce the energy

intensity of cobalt mining. Energy-efficient technology must be used in cobalt and

lithium mining operations to make them more sustainable and non-toxic to the

environment. These innovations have the potential to cut pollution and greenhouse

gas emissions. Utilizing renewable energy sources, such as hydroelectric, solar,

and wind power, can reduce mining's carbon footprint, reducing the need for fossil

fuels and improving environmental sustainability overall (International Energy

Agency, 2020). Further lowering fuel consumption and emissions can be achieved

by switching to energy-efficient machinery and implementing cutting-edge

technology like electric and hybrid equipment. Artificial intelligence (AI) and

automation innovations can maximize energy utilization and increase operational

efficiency (Nature Communications, 2018).

5.2 Using hydrogen as the fuel instead of the battery and gasoline.

People market hybrid cars as a sustainable option instead of an internal

combustion engine, claiming that hybrid cars are a more sustainable option.

However, a hybrid car's emission is gas, as the electric part of the car doesn’t emit
anything. I would suggest using water and fuel and converting it to hydrogen in

the engine (Toyota, n.d). It can give the same amount of power, and it emits steam

as the emission. An example of this is the Toyota Mirai. Hydrogen and oxygen

react chemically in a fuel cell stack to produce electricity, which is how hydrogen

fuel cell electric cars generate power instead of drawing from a battery. It takes

fewer than five minutes to refill their hydrogen tanks at a pump, and once you're

driving, you can enjoy rides with no harmful exhaust emissions (Carsome, 2023).

We surround ourselves with clean, safe hydrogen. It's so prevalent that it accounts

for 70% of all matter in the world. This makes it possible to obtain hydrogen

locally and, if produced using renewable energy, to produce it carbon-free. When

compared to battery electric vehicles, the extended range of hydrogen-powered

vehicles is their most alluring feature. While the average electric vehicle (EV) can

only go 300–400 km before needing to be recharged, hydrogen cars can often

travel 600 km before needing to be refueled. Refueling, on the other hand, is

similar to a traditional car. The only change is the type of fuel, a hydrogen car can

be fueled in as little as five minutes, whereas a battery-electric car may require

several hours. Another one advantage of hydrogen cell cars is that they are

lightweight. Overall, a hydrogen automobile fuel cell weighs less than a lithium-

ion battery pack. It also offers a higher energy storage density and takes up less

room. For this reason, a lot of professionals and businesses believe that hydrogen

is a superior choice for commercial vehicles, particularly big, long-haul trucks.

5.3 For battery degradation.

What I would recommend for battery degradation is using effective thermal

management systems that can help maintain the optimal battery temperature,

reducing the thermal stress that can increase the degradation (EG Electronics,

n.d.). Thermal management is basically the capacity to regulate a system’s

temperature using principles from thermodynamics and heat transfer. To put

simply, thermal management is the use of procedures and techniques aimed at

lowering or raising a system’s temperature. There are many things that can be

installed in a car to help the car battery to remain efficient. Installing heat pipes

and vapor chambers can improve the cooling efficiency through their two-phase

cooling mechanisms. The liquid at the heat source in both systems transforms into
 vapour as it evaporates. Through the cavity, the vapour then travels to the pipe's or

chamber's colder side, where it condenses back into liquid. The condensed liquid

is subsequently transported by capillary action via the wick back to the heated

region. Heat pipes only disperse heat down its axis, but vapour chambers can

disperse heat in numerous directions, providing more flexible cooling options.

This is the primary distinction between the two. Another product that can help

improve the heat dissipation between two or more solid surfaces would be a

Thermal Interface Material (TIM). One of the most important components of any

effective thermal management system is TIM. Since air gaps between components

can build up heat, TIM is utilised to seal them, usually as a result of tolerance,

roughness, or unevenness. Nowadays, modern TIM comes in a variety of product

forms, including phase change materials, thermal putty and grease, gap filler pads,

and non-silicone gap filler.

6.0 Digitalisation

I would recommend BMW use social media to market their product like YouTube,
Instagram, and TikTok. They would be able to interact with customers, present its newest
products, and spread awareness of its core principles. BMW can use visual storytelling as
one of its main social media strategies (Digital Agency Network, n.d.). The company can
use great quality photos and films to showcase its products in action, showcasing its
engineering and design skills. This will strengthen the company's brand image as a maker
of luxury cars and help it establish a personal relationship with its target market. Since
BMW has a large social media presence online,

7.0 Conclusion

References
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downsides-to-electric-cars?hide_donation_prompt=1 (Accessed: 5 June 2024).