Brand Audit of BMW: Historical Overview and Background

Brand Audit – BMW

• Historical overview and background
• Parent company background
• Existing brands
• History of chosen brand
• Any changes in positioning/target market
• Competitors
• Existing brand extensions (if any)

The birth of BMW can be traced back to Karl Rapp and Gustav Otto. Their respective companies; engine maker Rapp Motorenwerke and aircraft manufacturer Flugmaschinenfabrik Gustav Otto, gave rise to Bayerische Motoren Werke. In 1923, BMW began its first metamorphosis when it expanded from manufacturing airplane engines to motorcycles. This was an influential development for the company, as prior to the transition, BMW had only produced engines as a standalone part. Now, they were manufacturing an entire vehicle. They announced that their first motorcycle would be called the R32. The design was considered to be so efficient that the original 1923 concept is still used to this day in modern day BMW motorcycles.

Innovative, high-quality products made a name for BMW as swiftly as its top-class performances in the motor sport arena. In 1972, the company launched their newest BMW Motorsport subsidiary. BMW Motorsport was known for its top of the line standards and began to gain recognition for the power and quality of its vehicles. With its new found popularity, BMW changed the direction of the company and began manufacturing sports cars for the common man. Following the wild success of the BMW Motorsport subsidiary, new lineups such as the BMW Mountains, Yachtsport, and Golfsport began to introduce high-quality performance based vehicles to the market. Over the decades, the name BMW became synonymous with luxury. With its lines of sedans and sports cars, BMW became one of the great cornerstones of the automobile industry. By producing a differing range of products in the same product class, BMW is able to appeal specifically to different segments of the market depending on the customer’s needs and wants. BMW has a general target market of affluent men and women between 25-50.

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Along with Mercedes-Benz and Audi, BMW is considered one of the German big three manufacturers of luxury automobiles in the world. It’s market share expanded following the acquisition of the British-based Rover Group in 1994. The Rover Group is best known for their sports vehicles like the Mini, Mg, and Land Rover. Initially, BMW had big plans involving the Rover Group, but they eventually sold the group in 2000, keeping the Mini model for their own purposes. BMW’s hunger for acquiring other automobile manufacturers didn’t end there. In 1998, BMW purchased the Rolls-Royce group. Despite facing uncertainty for the near future, BMW sales have gone up this year. Sales have increased by 0.8 percent overall, worldwide, adding up to over 1.25 million cars delivered. In full year 2018, the BMW Group achieved its eighth consecutive annual sales record with a total of 2,490,664 BMW, MINI and Rolls-Royce delivered around the world. China was by far the largest country market for BMW in 2018 followed by the USA and Germany.

• Brand inventory (positioning)
• Brand elements
• Brand associations
• Positioning strategy (POP/POD)
• Target market
• Existing campaigns

BMW has developed a brand platform of high-level awareness and familiarity with strong and favourable brand associations. They’ve maintained this position following the introduction of their ‘Ultimate Driving Machine’ Slogan. In order to keep its advertising fresh, BMW integrated new taglines, such as; ‘Sheer Driving Pleasure’ and ‘Designed for Driving Pleasure’ in their advertisements. Although the new slogans still retained the spirit of emphasising the emotional aspects associated with the job of driving a BMW, consumers preferred the original slogan. To visually illustrate this philosophy, BMW’s logo is consistently presented on all their products, making it easier for consumers to recognise. Its iconic blue and white quarters are a representation of the State of Bavaria’s official colours.

Traditionally, car manufacturers have tried to measure their brands across a large number of image attributes, hoping to develop additional insights about brand differentiation. Such associations are a set of remembered qualities that help communicate information to the consumer. However, consumer perceptions of a brand’s reputation are generally consistent across different measures of value. For example, consumers believe that manufacturers whose car lines have a reputation for luxury and prestige tend to produce cars that excel in many other areas, such as ride, handling, safety, and reliability.

Deciding on a positioning requires determining the target market and the nature of competition and the optimal points-of-parity and points-of-difference brand associations. In other words, marketers need to know who the target consumer is, who the main competitors are, how the brand is similar to these competitors, and how the brand is different from them. In order to legitimately compete in the high-end cars market, BMW must have associations in common with their competitors. These Points of Parity are elements that are considered mandatory for a brand to be considered a legitimate competitor in its specific category. Indeed, to compete against other premium brands such as Audi, BMW have to maintain a reputation for the quality of their cars: high quality build, finishing, and design. However, brands needs to develop distinctive attributes or benefits (Points of Difference), so as to attract customers and have a competitive advantage over competitors. When BMW first made a strong competitive push into the U.S. market in the early 1980's, it positioned the brand as being the only automobile that offered both luxury and performance. At that time, U.S. luxury cars like Cadillac were seen by many as lacking performance, and U.S. performance cars like the Chevy Corvette were seen as lacking luxury.

To begin with, BMW vehicles sell well to consumers who have high standards for quality, luxury, and performance because BMW builds those attributes into its automobiles. They implemented a different marketing mix to sell cars to different socioeconomic segments, aggressively emphasizing premium segments.

· Consumer perceptions

The survey was given to 12 people. Out of these 12 people, 8 were male and 4 were female. The survey was given to people of similar age groups but different professions. The process used to capture the results left us unable to directly determine which responses came from the 12 respondents in the 16 to 25 year old age range. With that capability we could have better identified which segment of the market was responding positively or negatively to a question. The subheadings below will highlight and reflect on the results found within each area from the survey; which is provided in the Appendix.

· Brand awareness/usage

This section was focused on asking questions that determined how many customers actually recognised BMW as a brand. Close ended questions that required a direct response about if the individual was aware of any recent BMW advertisements was asked. They were also asked an aided awareness question to note which competitors were familiar. These questions provide key data points in the development of an overall brand or strategy. For example, a question was asked to gain an insight into which features customers relate BMW with. 95% strongly agreed that it was a luxury brand, however 75% disagreed that it was good value for money. This could be attributed to the low age group of the respondents, especially because the level of disposable income amongst this age group would be significantly low.

· Brand performance

When questioning consumers about brand performance, tangible aspects of the brand need to be acknowledged in order to determine if the customer’s functional needs are met by the product. While exceling in areas concerning the visual appeal of the model of the car, respondents were not convinced BMWs are suitable for a family. This links back to the question asked in regards to brand awareness, and respondents were unable to identify different makes and models of BMW.

· Brand imagery

The questions in this section were focused on gaining an understanding of the tangible or intangible elements that consumers associate with BMW. It can come from any of the five senses, and can be unique to each individual. The below graph dictates the responses to each question asked about words associated with BMW.

The positioning concept indicates how the management wants buyers to perceive the company’s brand (Cravens and Piercy, 2009). In this regard BMW has positioned the brand as the lone automobile that offers both luxury and performance. Its German legacy and reliance on designs, along with a clever marketing strategy, BMW has been able to achieve a point of difference on performance and a point of parity on luxury.

· Brand judgements/attitudes

This section emphasises customer’s personal evaluations and opinions of BMW. Judgements develop from performance and imagery associations and are focused on personal opinions and evaluations like perceived quality of the brand, credibility, consideration and superiority. Feelings, on the other hand, are the emotional responses and reactions to the brand like social approval, self-respect, excitement, fun. It is vital to get a legitimate positive reaction in the buyer mind as far as judgment and emotions.

· Brand resonance

Brand resonance is characterised by the strong connections customers have with BMW. Brands with strong resonance will benefit from increased customer loyalty, and decreased vulnerability to competitive marketing actions. The questions were tailored to determine the extent of brand loyalty possessed by the respondents. However, the automobile market in general has very low customer loyalty, even when satisfaction with a particular brand is high! This explains why that although 75% of respondents answered Yes to letting others know they own a BMW, only 15% answered ‘yes’ to feeling a connection with BMW as a company.

· Main findings

• reasons for gap (desired vs existing positioning),
• what are the main drivers of equity

BMW’s premium price is meant to guarantee the consumer a high level of quality engineering, which can display status or success in a visible manner for social approval. The car’s driving ability combined with its looks and advertised image distinguishes BMW from its competition, as reaffirmed by the results from the survey. It is positioned to attract consumers interested in more than an ordinary car for their money. The survey results indicate BMW to be strongly positioned. BMW produces models targeting the singles market as well as models for families. The survey data indicates the attributes relating to associations with the singles market to be far stronger than those focused on the family market.

Bibliography

1. Bekker, H. 2019. ‘2018 Global: BMW, Mini & Rolls Royce Worldwide sales’ Viewed 28 Oct 2019. < https://www.best-selling-cars.com/brands/2018-global-bmw-mini-rolls-royce-worldwide-sales/>
2. Chin, C. 2019. ‘This is what the BMW logo really means’. Viewed 29 Oct 2019. < https://www.thedrive.com/news/29376/this-is-what-the-bmw-logo-really-means-and-no-its-not-an-airplane-propeller>
3. Graham, T. 2019. ‘History of the BMW’. CarCovers. Viewed 30 Oct 2019
4. Kapoor, D. Panda, R. 2019. ‘Managing loyalty through brand image, judgement and feelings for leveraging power brands. Accessed 30 Oct 2019.
5. < https://www.degruyter.com/downloadpdf/j/mmcks.2016.11.issue-4/mmcks-2016-0020/mmcks-2016-0020.pdf>
6. Nica, G. 2019. ‘BMW posts record-breaking sales figures for first half of 2019. Viewed 30 Oct 2019. < https://www.bmwblog.com/2019/07/15/bmw-posts-record-breaking-sales-figures-for-first-half-of-2019/>