Marketing Audit of Bavarian Motor Works (BMW): Analytical Essay

Assessment question:

Analyse marketing audit and its usefulness. Using SWOT framework conduct a basic marketing audit of Nando`s (or any other organization of your choice) analysing its environment, current marketing performance and strategy. (LO2-40%)

The company selected for this project is Bavarian Motor Works, otherwise known as BMW.In this report includes a swot analysis (strengths, weaknesses, opportunities and threats).

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BMW is a German multinational company that produces automobiles and motorcycles. The company was founded in 1916 as a manufacturer of aircraft engines, which it produced from 1917 until 1918 and again from 1933 to 1945.

Automobiles are marketed under the brands BMW, Mini and Rolls-Royce, and motorcycles are marketed under the brand BMW Motorrad. In 2015, BMW was the world's twelfth-largest producer of motor vehicles, with 2,279,503 vehicles produced.

BMW is headquartered in Munich and produces motor vehicles in Germany, Brazil, China, India, South Africa, the United Kingdom, the United States and Mexico. BMW has significant motorsport history, especially in touring cars, Formula 1, sports cars and the Isle of Man TT.

The SWOT analysis framework involves analysing the strengths and weaknesses of the business’s internal factors, and the opportunities and threats of its external factors of performance Through this analysis, the weaknesses and strengths within a company can correspond to the opportunities and threats in the business environment so that effective strategies can be developed.

SWOT Analysis

BMW strengths:

BMW is a well-known company with a high status branding that has a very high recognition factor.

BMW has advertised their cars to consumers through media and film industry greatly over the years showing that their cars are built for all classes.

Another Strength is that they have high budget to invest which can pay for labour, services, or product research. This means that BMW is a profitable company who has enough money to invest.

They also have highly skilled labour, as BMW is a big company they need skilled labour to make their products because BMW is a branded company, if the labour is poor the products will be cheap and they can loose customers. To make customers they have to invest more. The more they invest, more they make profit.

BMW is known as one of the automobile manufacturing companies that produce luxurious types of cars. However, a huge amount of expenditure is being used for employing experienced labor in order to produce vehicles of a higher quality compared to its competitors like Mercedes Benz, Toyota and Volkswagen. Due to the fact that most cars in BMW are made with premium automobile parts and requires skilled workforce, BMW’s products tend to be priced higher in contrast to their competitors in the automobile manufacturing industry

BMW weaknesses:

• Research and Development.
• High prices.
• BMW is a well-known company with a high status branding.
• Customer needs.

BMW is known as one of the automobile manufacturing companies that produce luxurious types of cars. However, a huge amount of expenditure is being used for employing experienced labor in order to produce vehicles of a higher quality compared to its competitors like Mercedes Benz, Toyota and Volkswagen. Due to the fact that most cars in BMW are made with premium automobile parts and requires skilled workforce, BMW’s products tend to be priced higher in contrast to their competitors in the automobile manufacturing industry

BMW opportunities:

• Innovation and Alliances.
• Diversification.
• New Technology.
• New Line.

BMW threats:

• Chinese Manufacturers.
• Rising Fuel Prices.
• Mercedes and Audi.
• Recession.

Brand value is closely related to brand recognition and its positive reputation, which means that BMW brand is one of the most recognizable automotive brands. BWM has a reputation of producing perfectly engineered vehicles, which offer luxury driving that few other brands can offer.

High brand recognition helps the company to introduce related product and services to the market faster and without huge advertising expenditure.

BMW has created a high expectation putting them in the spotlight. If one of the products loses its brand image then the whole group can lose its brand image. They have few Opportunities such as that they can merge with other international companies and promote their products. They can enter a new market providing low end cars. BMW’s threats are Chinese car manufactures producing similar cars. Being a company of such high calibre such manufactures should not be a threat to them and they should be able to ensure their customers of their product.

BMW Group pursues product differentiation business strategy and differentiates its vehicles on the basis of design, performance and advanced features and functionalities. Moreover, high level of integration of information technology and internet, as well as, electromobility represent solid grounds of BMW Group competitive advantage. At the same time, BMW Group has certain weaknesses that include a lack of portfolio diversification with only three brands, a high level of vulnerability to economic crises due to the premium pricing strategy and the lack of strategic partnerships with other businesses within and outside of automobile industry.

Assessment question:

Carry out research and present information on a Nando`s targeted marketing segments. (LO 3 -30%)

The STP model is useful when creating marketing communications plans since it helps marketers to prioritise propositions and then develop and deliver personalised and relevant messages to engage with different audiences.

• Segmentation: The process of dividing a market into smaller segments of buyers with distinct needs, characteristics or behaviours that might require separate marketing strategies or mixes.
• Targeting: The process of evaluating each market segment’s attractiveness and selecting one or more segments to enter and maintain a marketing mix intended to meet the needs of that group. Targeting is the step that follows segmentation.
• Positioning: A process that influences potential customer’s overall perception of a brand, product line, or organisation in general. Position is the place a product, brand or group of products occupies in the consumers’ minds relative to the competing offering.

BMW segmentation, targeting and positioning can be specified as the base of the marketing efforts of the company. BMW, as well as, any other business entity has to divide population into different categories according to a set of certain criteria and develop products and services that are particularly attractive to this specific group. This marketing process is known as segmentation, targeting and positioning. Segmentation, targeting and positioning is important because businesses cannot offer products and services that are attractive to all members of population in an equal manner. Segmentation implies dividing potential customers into different groups according to certain criteria such as age, social class, lifestyle etc. Segmentation can be divided into four types: demographic, behavioral, and psycho-graphic.

There is many ways to segment the market, such as:

• * Geographic segmentation: region, country size, city size, density, climate * Demographic segmentation: age, gender, family size, family life cycle, income, occupation, education, religion, race, nationality * Psychographic: social class, lifestyle, personality
• * Behaviour segmentation :purchase occasion, benefits sought, user status, usage rate, loyalty status, readiness state, attitude towards product

The BMW segmentation would look like that:

Geographic: All world

Demographic:Age between 30- 65+; gender male and female; family size 3-4; family life cycle singles, married with and without children; income £ 30000+; occupation professionals and technical, managers; education university, postgraduate, professionals; religion; race; nationality

Psychographic: Social class: middle class, upper middles, lower uppers; lifestyle achievers, strivers; personality ambitious, successful.| Behavioural| Purchase occasion regular occasion; benefits sought prestige, comfort, quality, reputation; user status regular user; loyalty status strong|

BMW Group has a strategy of targeting their customers by using segmentation. Geographically, BMW Group targets the areas that are more industrialized like Europe, North America, some parts of Asia and Africa i.e. China and South Africa. More than 70% of sales of BMW cars are recorded in Europe and North America.

Assessment question:

Analyse current marketing mix strategies employed by Nando`s and make recommendation to improve its current marketing mix to appropriately target its marketing segments. (LO5 – 30%)

The marketing mix is the set of controllable tactical marketing tools that an organisation blend to produce the response it wants from the target market. The marketing consists of everything the organisation can do to influence the demand for its products and services. The many possibilities gather into four groups of variables known as the Four P’s: product, price, place and promotion. More recently, two further P’s were added — process and physical evidence.:

BMW Product

BMW Group is engaged in development, manufacturing and the sale of engines as well as all vehicles equipped with those engines. BMW Group owns and sells its vehicles under the following three brands: BMW, MINI COOPER, ROLLS ROYCE.

The company pursues product differentiation business strategy and maintains 13 research and development centres in five countries. Vehicles produced under BMW Group brands belong to the premium segment and accordingly, they have highly efficient and reliable with advanced set of features and capabilities. BMW leads the automobile industry in electromobility and the brand is also famous for achieving a high level of integration of internet and digitalization in its vehicles.

Bmw Place

BMW Group has about 6,000 dealerships and sales representatives in 150 countries globally. The worldwide distribution network currently consists of around 3,310 BMW, 1,550 MINI and 140 Rolls-Royce dealerships. In China alone, around 60 BMW dealerships were opened in 2015.The dealership and agency network for BMWi comprises about 950 locations. As it is illustrated in figure below, China, USA and Germany represent the largest automobile markets for BMW Group and accordingly, these countries accommodate the largest numbers of dealership offices and representatives.

Bmw Promotion:

The promotional and advertising strategy in the BMW marketing strategy is as follows:

BMW has been a world-renowned brand for over half a century. The company has been a strong advertiser of its products and other offerings. The promotional strategy as a part of its marketing mix focuses on aggressive advertising using media channels like TV, online ads, billboards, print ads etc so that it can create a continuous brand awareness. BMW has been a close sponsor for various rally racing events and other sports events. The company also promotes many celebrated sports teams and rally racers. BMW has been a constant participant in various international rally races for a long time. They have been a successful team at the F1 races on numerous occasions.

Apart from the F1, BMW has also been a strong contender at the Superbike racing category. Since the beginning of its motorcycle manufacturing in 1923, the company has been actively participating in various racing events. Apart from the participation, the company has been a major organizer of such event globally. These events have led to BMW being recognized as a fast and reliable automobile over the years. Moreover, due to the huge fan following of such racing events across the globe, BMW has found an effective way to reach out to newer markets. Hence, this conclude the BMW marketing mix.

BMW People:

• BMW has people working under its sales team that play a vital role in its marketing efforts. These people have been trained in persuasive techniques, but also to show respect to the business customers taking into consideration their preferences.
• BMW has people working in its customer service department. These are contacted by customers in case of any issues within the product, and these people guide customers through the process of getting the issues resolved. These people are trained to respect the customers and try their best to get their issues resolved.
• BMW has people working with suppliers to obtain raw materials. These people play a vital role in maintaining or improving the quality of the final product produced.
• BMW has people working at retail stores who help the customer on site, by answering any questions or helping them decide the product that best suits their needs.

BMW Process

• BMW to make sure that its products are always available at retail stores has systems installed where retailers can notify when their inventory levels are low. BMW provides them with more products while ordering its productions to replenish its stock. This ensures that products are always available to customers when needed.
• BMW has an online delivery process, where orders are received in the computer system and based on these orders, the relevant product from the inventory is shipped to the delivery service provider.
• BMW is actively involved in researching market opportunities in order to understand customer needs. It also develops understanding regarding customer needs through feedback collected at store, its helpline or social media pages.

BMW Physical Evidence

• BMW sells its products in a distinct color packaging that easily identifiable on retail shelves. These are placed on special shelves provided by the company, which also have a distinct color and design. This makes it easier for customers to locate such shelves in busy retail stores.
• BMW has an online website that is user-friendly and allows customers to view its products in high quality images taken from various angles.

BMW should collect feedback from its customers regarding its packaging so that it could improve on this.BMW should set up its own stores where it provides a shopper-friendly environment and ambience, encouraging its customers to purchase its products.

BMW should undergo trainings for its sales force, customer services and purchasing people as these play a vital role in delivering value to the customers.BMW should provide incentives to its sales force through bonuses for meeting targets, or through commissions for the sales made. BMW should hire people that show respect towards customers, and are committed to the company.

BMW has 24 hours hotline number to help in communication with the company exclusively for certain model customers. They have a website for online communication. They believe in listening to customers when they are “with” you.

BMW strives hard to find out what their customer need are and works hard to wards fulfilling them. They believe that it is important to satisfy customer needs to keep customers happy and satisfied.

BMW also realizes that all the costs taken to design their cars are also to be included in the cost of the car. They have retailers selling their cars in different regions/countries at different prices based on the acceptable customer cost for that region.

The UK has an important role to play within the BMW Group. It is the only place in the world where all three of BMW Group’s brands – BMW, MINI and Rolls-Royce Motor Cars – are represented by manufacturing operations. BMW Group employs around 8,000 people directly in the UK with an additional 14,000 in its 147-strong Retailer network representing BMW and MINI brands. The company has invested nearly £2 billion in its UK operations since 2000, and the UK is BMW Group’s fourth largest sales market in the world

References:

1. https://en.wikipedia.org/wiki/BMW/
2. https://www.bmw.co.uk/en/footer/experience-bmw/about-us.html
3. https://www.bmwgroup.com/content/dam/bmw-group
4. BMW Group (2016). Annual Report 2016. Available at: https://www.bmwgroup.com/content/dam/bmw-group-websites/bmwgroup_com/ir/downloads/en/2015/12784_GB_2015_engl_Finanzbericht_Online.pdf Accessed 7th December, 2016
5. Interbrand (2016) Best Global Brands 2016. Available at: http://interbrand.com/best-brands/best-global-brands/2016/ranking/ Accessed 7th December, 2016