Target Marketing and Market Segmentation
Table of Contents
1. Market Definition
2. Market Targeting
1. Segment 1
2. Segment 2
3. Market Profiling
1. Segment 1 – Older Affluent Professionals
Segment 2 – Young Male Affluent Professionals
4. Product Attributes
1. BMW Series 7 – Segment 1 – Older Affluent Professionals
2. BMW Z4 – Segment 2 – Young Male Affluent Professionals
The Australian Automotive Market is one of the largest and fastest growing industries in the Australian economy. BMW is a world renowned automotive manufacturer and one of the leading designers of luxury and luxury sport vehicles. This report aims to identify the market that BMW is involved in and to further investige some of the target market and market segmentation strategies that BMW uses to claim its market share. It will also examine two specific target markets that BMW operates in and the typical customers contained in that target market. This report should allow us a better insight into BMW marketing strategies and enable us to continue on with more indepth reports if necessary. 1. Market Definition
A market is defined as “a group of individuals and/or organisations that have needs for products in a product class and have the ability, willingness and authority to purchase those products” (Pride et al, 2006, pg 38). This report aims to take that definition of a market and use it to analyse the marketing strategies and positions maintained by the Bavarian Motor Works Group, commonly known as BMW. According to a report published by Frost & Sullivan (2005), the Australian Automotive Market has emerged as an integral part of the Australian economy, contributing to increases in the labour force and research areas while also providing much needed work for Australian manufacturing firms. With a “vehicle ownership rate of 675 per 1000”, it is not difficult to see why. According to the Federal Chamber of Automotive Industries (FCAI) (2006) database, a total of 962,666 new vehicles were sold to the Australian public by the 2006 year end. The total vehicle market encompasses all vehicles sold during 2006, broken down into 4 distinct categories, Passenger, SUV, Light Commercial and Heavy Commercial. This report will focus mainly on the Passenger vehicle market and, as such, BMW’s involvement and marketing strategies in that sector.
As noted by the BMW Group website (n.d), BMW was founded in 1916 and has continued to produce high quality, premium automobiles and motorcycles for over 90 years. The company strategy, located on the BMW Group website (n.d), emphasises BMW’s commitment to the outstanding development and continued improvement of the BMW design while maintaining the highest quality.
2. Market Targeting
A target market refers to specific groups of consumers that an organisation or company will attempt to cater a specific product towards (Pride et al, 2006, pg 6). Selecting a target market is one of, if not the most important aspect that a company must consider as it is impossible to create a marketing strategy that caters to an entire market. Breaking down the market into smaller sections allows companies to target a specific group and to design a product based entirely on their specific needs and wants (Pride et al, 2006, pg 6, 38-40).
To relate the concept of target marketing to BMW, we look at the differing products offered by BMW and the specific customer they are marketed towards. BMW accomplishes the market segmentation by producing a differing range of products in the same product class. This allows them to appeal specifically to different segments of the market depending on the...
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