The automobile industry has grown to be a very dynamic one in the recent years. Even though the essential use of this industry has been to satisfy the customer’s need to travel from one place to another in comfort, the constantly changing market, has slowly changed customer’s needs into wants paving way for high competition in the automobile arena. This essay gives a brief analysis on BMW, one of the leading brands in the industry and how they effectively use marketing as a tool to achieve the status they enjoy now. Even though BMW produces various automobiles including motorbikes and are into financial service sector, this essay will look into only the cars produced by the BMW.
To summarise Bayerische Motoren Werke’s (BMW) history, they began manufacturing aero engines during world war two but later turned to become one of the biggest manufacturer of automobiles in Germany. This company better known for its high performance engines along with great quality, has not always enjoyed success and had faced bankruptcy in 1959, when it found a saviour in their major shareholder, Herbert Quandt.1
BMW, which mainly specialises in manufacturing cars, is always associated with its brand equity. They have high brand image based on how they target their audience and their pricing. The brand BMW mostly goes hand in hand with prestige and owning one is said to reflect the owner’s status in life. BMW produces premium range cars which are not affordable by all. They have extended their brand by acquiring the Mini and the phantom range of Rolls Royce, both having their own brand images. This association adds value to them as well as enhances BMW’s own brand value in the market.
Quality is not an issue in the automobile industry. Most competitors produce high quality cars.1 BMW stands out with their product differentiation strategy of high end design along with strong brand values with innovative improvisation in their product. Their target markets mainly include the upper middle class and the upper class society. Since, it is priced at premium rates, they market their product in such a way that the customers can emotionally relate to the brand. They promote their car as the ultimate driving machine which in itself targets the customers emotionally. This sells the experience of owning the brand rather than any car.
Understanding Consumer behaviour is very important in BMW’s case. The reason that drives consumers’ to buy a particular brand or choose BMW over its competitors is that they can relate to the product emotionally. For example, if a consumer decides to buy a BMW, he reasons to buy it so that he could be associated with the brand’s qualities which are power, security and all round efficiency. The choice criteria used by customers in terms of technical, economic, social and personal perspectives, BMW targets to appease their customers in all sections. They focus on technological expertise with preference to style, comfort and emphasis on performance. In the case of economic criteria, they stress on value for money as their cost of ownership is comparatively high. This gives a very good residual value of trade in for the car brand. Their pricing strategy shows that even though they are premium brands segmenting their market at a higher economy range, they do produce models of all ranges and they cash in on their brand equity to maintain their level of profit margin. More than the technology and economic aspect, most consumers seem to choose BMW for the social and personal reasons which include the status it brings to customers merging fashion with it. People choose BMW for self image and that is why BMW target their customers emotionally which can be clearly understood from the statements of H.Panke, the CEO of the company, in 2004, which is, “We offer our customers emotional products, which, through the strengths of the brand and the substance of the product, fulfil the customer’s wish for...