Introduction
Bayerische Motoren Werke AG manufactures BMW, which is the ideal performance car that combines efficiency with luxury. BMW is manufactured in Germany and represents both power and elegance. Having begun in 1916 as an aviation engine manufacturer, BMW has since evolved into a global powerhouse in the automotive sector, attracting a diverse range of devoted customers across various demographics (Kotler et al., 2019). This success can be attributed to the industry’s aggressive marketing campaigns targeting specific demographics within popular trend groupings, based on public desires within those demographics and groups.
Understanding BMW’s Marketing and Consumer Strategies
Consumer-Buying Process
BMW’s marketing success may be traced back to the company’s customer purchasing procedure. When it comes time for customers to buy a new car, they consider which model, features, and options are most important to them and how much money they want to spend. At this point in the buying process, customers have a clear idea of the goals they want to achieve with their purchase. Using this data, you may find the most appropriate product for your needs. Examining the choices is carried out, and a decision is made on which option is best for the customer.
After a choice has been made and a purchase has been completed, the customer’s post-purchase behavior is closely watched to ensure that the consumer has the least amount of buyer’s remorse, also known as consumer regret. To assess current client wishes and inclinations, as well as how to effectively advertise the company’s products to the target demographics, BMW can utilize real-time marketing strategies.
Data Analytics
Managing the anticipation of marketing adjustments may be a challenging task. As a result of the availability of large amounts of data, updated processes have been implemented. Automobile manufacturer BMW has earned a reputation for providing customers precisely what they desire (Kotler et al., 2019).
Using big data, the marketing team can go beyond the apparent overriding demand for the luxury car and utilize statistical research to highlight the company’s other competitive advantages. Considering BMW’s ability to gather feedback from current consumers, the corporation may implement changes to exhibitions, dealers, and digital platforms in response to what the brand represents, which would be an improvement. By gathering, conserving, and leveraging data from various sources, BMW’s marketing departments can utilize this investment to better serve its current and future customer bases for many years.
Selective Target Marketing
Having a thorough understanding of the buying habits of the numerous demographics to whom BMW caters, as well as consumer trends, has helped the business perform effectively with the vast spectrum of clients to whom BMW caters. For example, BMW knows precisely what each group wants regarding car purchasing and has produced a special series of automobiles for that particular target market.
When people in the lower-income brackets wanted a luxury car but did not have to pay the original premium, BMW manufactured the 1 Series. Although it is significantly less expensive than the company’s other models, all the comforts consumers have come to expect from the brand are still included. These cars are designed for those who cannot afford the high prices associated with BMW’s more expensive models but still want to associate with the BMW brand name.
BMW designed a new class of luxury SUVs to cater to upper-class customers who are more active yet still desire the high-end BMW experience (Kotler et al., 2019). More focus on BMW’s lower-priced models may broaden the company’s client base. This would foster more customer loyalty, particularly in today’s economic climate. In general, focused marketing has assisted BMW in several ways, including helping the corporation enter untapped and neglected areas, better concentrate on customer needs, manufacture customized products, and employ advanced engineering and durable models. BMW has been harmed by selective target marketing, and this issue needs to be addressed.
Analyzing BMW’s External Environment and Strategic Position
Situational Analysis
Political Analysis
As a well-established global player, BMW is well-versed in the politics that influence its business operations and distribution. Treaty rules were established to prohibit the development of aircraft engines for the German armed forces during World War I from continuing (Goldblat, 2020). Since then, BMW, as well as all other manufacturers, has had to comply with international norms and standards established by governments worldwide.
The CO2 emission regulation mandates that all newly manufactured autos meet specific CO2 environmental standards. Due to the new tax policies implemented by the German government, BMW’s German distribution centers have seen a decline in sales of vehicles with higher emissions and fuel consumption levels. According to a judgment by the European Union Commission, the foreign sale of automobile goods must be regulated to ensure that safety, environmental, and quality criteria are met.
Economic Analysis
A greater understanding of international markets and the significance of currency grading systems is becoming more critical for BMW as the firm expands globally. To achieve this, BMW has significantly increased its monitoring of global markets and economic activities. When economic fluctuations arise, as in the case of the current COVID-19 pandemic, the firm can better manage them and develop a more effective strategy for ensuring economic stability. There are growing concerns about political tensions in several countries, which may directly impact pricing and taxes, requiring the firm to reorganize its operations to keep pace with the company’s earnings, despite current economic conditions.
Sociocultural Analysis
BMW must maintain the utmost respect for global social issues and consumer habits to retain a worldwide presence. As a result, BMW’s top executives charged the company’s corporate social responsibility team with devising programs that would track and address social issues as they arose, paving the way for the creation of the BMW Group. Consequently, in its efforts to ensure social progress, this organization has earned multiple accolades for its work on various initiatives that benefit the local community while enhancing its brand’s visibility (Delacroix et al., 2019). BMW has better connected its operations with social concerns and customer behavior via the $39.1 million it spends yearly on worldwide charitable outreach. BMW’s Clean Energy project was designed to meet the growing global demand for environmentally friendly products.
Technology Analysis
BMW is aware of the potential for data abuse and misalignment, as well as unauthorized access to BMW systems and data related to the company’s information technology presence. BMW has built several data monitoring technologies to prevent these dangers from occurring. High-end and luxury automobiles are expected to have the most advanced technology available. BMW has taken advantage of this by including new features in its latest models. The constancy of BMW’s efforts to remain at the forefront of the next generation of automobiles is evident in examples such as these, which is why the company’s products are so sought after by customers.
SWOT Analysis
Strengths
For the last decade, BMW has retained its position as one of the world’s most valuable automobile brands. This value enables the corporation to take more risks in terms of company organization and product marketing. As a result of the company’s worldwide success, Chinese manufacturing relationships have become an essential aspect of its international expansion. Since BMW has developed hybrid and electric car lines, the business’s ecological footprint has become a key strength for the corporation. BMW is unmatched in its ability to keep pace with consumer trends and maintain a strong corporate presence.
Weaknesses
The debt issue has been a problem for BMW for years, despite its total worth making it one of the world’s most valuable companies. The corporation owes a substantial amount of money to foreign creditors, and this debt is expected to continue growing in the future. Due to the exorbitant cost of premium brands like BMW, the pandemic has damaged their customers’ ability to buy their automobiles. BMW’s consumer demand has dwindled due to its business strategy, which suggests that customers are not purchasing automobiles or the brand. Consumers have expressed worry about the low amount of product diversification since there has been a noticeable need for more options.
Opportunities
New generation releases from BMW allow the corporation to have a bigger marketing presence and generate more in-demand items. In recent years, demand for self-driving automobiles has been quite strong. Some people are curious about the prospect of this technology in their favorite model or brand of car because of the way it is shown in movies and on television. To cope with industry leaders like Tesla and Volkswagen, who have already implemented this technology, BMW’s R&D teams are hard at work (Batran et al., 2017). BMW stands to gain from rate flexibility in the currency market and may take advantage of the poor Euro exchange rate.
Threats
BMW’s worldwide success and reputation may be jeopardized most by increased competition in the automobile sector. Keeping up with other car firms’ latest products and technology improvements is necessary. As a result of government action, BMW must be prepared to deal with external concerns that may arise. If BMW is not ready to deal with new government rules, tariffs, rising taxes, and energy prices, this might raise the company’s operating and manufacturing expenses. Tariffs on imported products imposed because of these restrictions might limit or even stop the growth of the U.S. market.
Problem
International businesses are operating in uncharted territory in today’s global economy. Companies have had to rethink how they work and deal with the effects and experiences of the COVID-19 outbreak on their customers, some permanently (Dwivedi, 2020). The recent decrease in automobile stock values is a critical problem that needs to be addressed. As a result of the pandemic, BMW has been obliged to restructure already-in-progress development stages and lay off many employees. As COVID-19 instances are projected to climb significantly in the coming months, BMW must take efforts to plan for recovery and brace for the likelihood of a prolonged wave of essential shutdowns.
Alternatives
Like many other organizations, BMW was ill-prepared for the destruction that would follow this epidemic. To regain the trust of its investors, BMW must demonstrate to them that economic stability is possible and make all necessary efforts to ensure that this confidence is not misplaced. To avoid more layoffs, BMW might operate under a limited work-hours arrangement, ensuring the company would lose as little money as possible.
Advertisement campaigns highlighting BMW’s dedication to customer service and quality might potentially be launched in the aftermath of this epidemic, as many other firms have done. As the epidemic ends, this might help boost customer loyalty and, in turn, shareholders’ trust in the company. BMW’s development teams could be tasked with relaying timetables for new models and autonomous technology projects. Before the pandemic, the company had collaborated with Mercedes to show consumers that progress was being made in developing new products to keep up with demand.
Recommendations
Consumer-centric strategies are essential for a company’s post-COVID recovery since the stock value is more at risk in these times. Consumers want to know that even if they cannot acquire these things now, they will still be accessible when times return to normal. To achieve this, BMW cannot afford to entirely disavow its alliance and cooperation with Mercedes on developing autonomous car projects. Providing customers and shareholders with a clear schedule via a marketing effort focusing on the future need for this technology would help soothe consumer concerns about the ability to meet demand. It would give shareholders hope that earnings would return to normal levels.
References
Batran, A., Erben, A., Schulz, R., & Sperl, F. (2017). Procurement 4.0: A Survival Guide in a Digital, Disruptive World. Campus Verlag.
Delacroix, E., Parguel, B., & Benoit-Moreau, F. (2019). Digital subsistence entrepreneurs on Facebook. Technological Forecasting and Social Change, 146, 887-899.
Dwivedi, Y. K., Hughes, D. L., Coombs, C., Constantiou, I., Duan, Y., Edwards, J. S.,… & Upadhyay, N. (2020). Impact of COVID-19 pandemic on information management research and practice: Transforming education, work, and life. International Journal of Information Management, 55, 102211.
Goldblat, J. (2020). Agreements for Arms Control: A Critical Survey. Routledge.
Kotler, P., Keller, K., Brady, M., Goodman, M., & Hansen, T. (2019). Marketing Management: 4th European Edition. Pearson UK.