Focusing on premium brands
BMWs core strategy
©2004
Bachelorarbeit
66 Seiten
Zusammenfassung
Inhaltsangabe:Abstract:
The word marketing is always appearing in most articles and books dealing with selling, the word has been watered down and in many cases lost its true value and sense. Most people mistakenly identify marketing with selling and promotion - but selling is only the tip of the marketing iceberg. It is simply one of several marketing functions, and often not the most important one. If the marketer does a good job of identifying consumer needs, developing appropriate products, and pricing, distributing, and promoting them effectively, these goods will sell very easily.
Companies have to search for buyers, identify their needs, design appropriate products, promote them, store and transport them, negotiate, and so on. Such activities as product development, search, communication, distribution, pricing, and service constitute core marketing activities.
We have defined the core marketing activities; supporting the sales force in their pursuit of revenues and profit. The marketing department have to focus multiple tasks ranging from product development to pricing.
Often the marketing department is so intertwined in the sales processes that the marketing and sales division is one division, in order to maintain the direction required in order to achieve the objectives set up by the management.
In the first part of this case we will look at the general term; strategic marketing and set up fictitious examples of how a company in the automotive industry would deal with strategic marketing and look at the tools available to the marketing department and how they are implemented.
Being a multinational company like BMW you need a strategy for virtually prior to make a decision and this applies to marketing as well. The company has the past two decades developed from an international company to a global player, where the set of standards are different and the requirement for setting up a marketing strategy has changed.
We have decided in this case to analyze the decisions behind launching certain products; such as the roadster; the Z Series and the X Series, which meant that BMW for the first time in its history ventured into new segments normally being dominated by other manufactures.
The decision to leave the traditional segment where BMW had for years been successful and diversify the product line will be analysed and in the introduction we will try to cast a light on the tools and means behind such decisions.
In the middle of the […]
The word marketing is always appearing in most articles and books dealing with selling, the word has been watered down and in many cases lost its true value and sense. Most people mistakenly identify marketing with selling and promotion - but selling is only the tip of the marketing iceberg. It is simply one of several marketing functions, and often not the most important one. If the marketer does a good job of identifying consumer needs, developing appropriate products, and pricing, distributing, and promoting them effectively, these goods will sell very easily.
Companies have to search for buyers, identify their needs, design appropriate products, promote them, store and transport them, negotiate, and so on. Such activities as product development, search, communication, distribution, pricing, and service constitute core marketing activities.
We have defined the core marketing activities; supporting the sales force in their pursuit of revenues and profit. The marketing department have to focus multiple tasks ranging from product development to pricing.
Often the marketing department is so intertwined in the sales processes that the marketing and sales division is one division, in order to maintain the direction required in order to achieve the objectives set up by the management.
In the first part of this case we will look at the general term; strategic marketing and set up fictitious examples of how a company in the automotive industry would deal with strategic marketing and look at the tools available to the marketing department and how they are implemented.
Being a multinational company like BMW you need a strategy for virtually prior to make a decision and this applies to marketing as well. The company has the past two decades developed from an international company to a global player, where the set of standards are different and the requirement for setting up a marketing strategy has changed.
We have decided in this case to analyze the decisions behind launching certain products; such as the roadster; the Z Series and the X Series, which meant that BMW for the first time in its history ventured into new segments normally being dominated by other manufactures.
The decision to leave the traditional segment where BMW had for years been successful and diversify the product line will be analysed and in the introduction we will try to cast a light on the tools and means behind such decisions.
In the middle of the […]
Leseprobe
Inhaltsverzeichnis
ID 8193
Adari,Johannes; Taube, Pascale; Thrane, Henrik:
Focusing on premium brands - BMW's core strategy
Hamburg: Diplomica GmbH, 2004
Zugl.: Hogeschool Zeeland Vlissingen / NL, Projektarbeit, 2004
Dieses Werk ist urheberrechtlich geschützt. Die dadurch begründeten Rechte, insbesondere die
der Übersetzung, des Nachdrucks, des Vortrags, der Entnahme von Abbildungen und Tabellen,
der Funksendung, der Mikroverfilmung oder der Vervielfältigung auf anderen Wegen und der
Speicherung in Datenverarbeitungsanlagen, bleiben, auch bei nur auszugsweiser Verwertung,
vorbehalten. Eine Vervielfältigung dieses Werkes oder von Teilen dieses Werkes ist auch im
Einzelfall nur in den Grenzen der gesetzlichen Bestimmungen des Urheberrechtsgesetzes der
Bundesrepublik Deutschland in der jeweils geltenden Fassung zulässig. Sie ist grundsätzlich
vergütungspflichtig. Zuwiderhandlungen unterliegen den Strafbestimmungen des
Urheberrechtes.
Die Wiedergabe von Gebrauchsnamen, Handelsnamen, Warenbezeichnungen usw. in diesem
Werk berechtigt auch ohne besondere Kennzeichnung nicht zu der Annahme, dass solche
Namen im Sinne der Warenzeichen- und Markenschutz-Gesetzgebung als frei zu betrachten
wären und daher von jedermann benutzt werden dürften.
Die Informationen in diesem Werk wurden mit Sorgfalt erarbeitet. Dennoch können Fehler nicht
vollständig ausgeschlossen werden, und die Diplomarbeiten Agentur, die Autoren oder
Übersetzer übernehmen keine juristische Verantwortung oder irgendeine Haftung für evtl.
verbliebene fehlerhafte Angaben und deren Folgen.
Diplomica GmbH
http://www.diplom.de, Hamburg 2004
Printed in Germany
Page 2
Index of 6
th
Case Study: Marketing Strategies
1.
Introduction: What is marketing? ...5
1.1
Strategic Marketing in the automotive industry... 6
1.2
The strategic marketing process ... 7
1.3
The automotive industry's mission and strategy tools ... 8
1.3.1
The Nine Cells Model... 8
1.3.2
SWOT Analysis ... 9
1.3.3
The Boston Consulting Group growth share matrix... 13
1.3.4
The Ansoff Growth matrix ... 16
1.3.5
The 5 Forces by Porter ... 18
1.3.6
The 7 "S" by McKinsey... 20
2.
Introduction of BMW's Globalization Strategies ...22
2.1
External Growth-Strategy: M&A-Transaction with Rover... 22
2.2
Production follows the Market-Strategy: The U.S. Plant... 23
2.3
Global Distribution Strategy... 24
2.4
Global Stock Market Approach by introducing IFRS / IAS... 24
2.5
Multi-Premium-Brand and Product-Line Strategies ... 24
3.
Focusing on premium brands BMW's core strategy ...25
3.1
Defining the problem ... 25
3.2
BMW's state of art in Marketing Management... 26
3.2.1
How does BMW drive a Multi-Brand Strategy ... 27
3.2.2
The 3 elements of Premium Brand Politics ... 28
3.2.2.1
Focus ... 28
3.2.2.2
Emotionality ... 29
3.2.2.3
Continuity ... 29
3.2.2.4
Intermediate result ... 30
3.2.3
Brand portfolio of the BMW Group ... 30
Page 3
3.3
Brand Management by the BMW Group ... 30
3.3.1
The meaning of Marketing in the BMW Group ... 31
3.3.2
Definition and structure of brand identities ... 32
3.3.3
Implementation of brand identities ... 32
3.3.3.1
Implementation of brand authenticity within the product politics .. 33
3.3.3.2
Brand design equals Corporate identity ... 34
3.3.3.3
Clustering by Research of Environment... 35
3.3.3.4
Monitoring brands ... 37
3.3.3.5
Creating a BMW-specific world ... 37
3.4
Continued development of the brand's identities... 38
3.5
Summary... 38
4.
Capital-market perspective: a fresh view on value creation ...39
4.1
Comparison of the automotive market in 2000... 39
4.1.1
BMW Group resolved reorientation ... 41
4.1.2
Manufacturers brands and customers perception ... 41
4.1.3
Automobile manufacturer and their brand positions ... 42
4.2
BMW Group started their re-orientation in 2000... 44
4.2.1
BMW Group achieved record sales in 2000 ... 45
4.2.2
BMW stocks countered the general trend in 2000... 46
4.3
BMW Group in 2001 continued in its product and market offensive ... 46
4.3.1
BMW revenues on a new high level ... 47
4.3.2
BMW Group is still investing on high level in 2001... 47
4.3.3
11
th
of September and the effects on the world stock market... 48
4.4
BMW Group in 2002 a year of the implementation of new products... 49
4.4.1
BMW Group outpaced in the premium sector in 2002... 50
4.4.2
BMW Group invested heavily in 2002 ... 52
4.4.3
2002 a poor year for the stock market... 52
4.4.4
BMW suffered losses in the stock course in 2002... 53
4.5
2003 BMW Group continued pushing ahead... 53
4.5.1
Premium brand segment recorded higher growth in 2003 ... 54
4.5.2
BMW Group 2003 surpassed last years sales ... 54
4.5.3
2003 a positive trend at the stock markets... 55
Page 4
5.
BMW renewing their strategy a failure or a success story ...56
5.1
BMW Group sales results and investments... 56
5.2
Changes in the most significant BMW markets ... 57
5.3
BMW stock development... 58
6.
Summary and outlook ...58
Bibliography of 6
th
Case: Marketing Strategies...60
Page 5
1.
Introduction: What is marketing?
According to the Oxford Advanced Learner's dictionary the definition of marketing is:
"Theory and practice of (large scale) selling"
1
The word marketing is always appearing in most articles and books dealing with
selling, the word has been watered down and in many cases lost its true value and
sense.
Most people mistakenly identify marketing with selling and promotion - but selling is
only the tip of the marketing iceberg. It is simply one of several marketing functions,
and often not the most important one. If the marketer does a good job of identifying
consumer needs, developing appropriate products, and pricing, distributing, and
promoting them effectively, these goods will sell very easily.
Companies have to search for buyers, identify their needs, design appropriate
products, promote them, store and transport them, negotiate, and so on. Such
activities as product development, search, communication, distribution, pricing, and
service constitute core marketing activities.
We have defined the core marketing activities; supporting the sales force in their
pursuit of revenues and profit. The marketing department have to focus multiple tasks
ranging from product development to pricing.
Often the marketing department is so intertwined in the sales processes that the
marketing and sales division is one division, in order to maintain the direction
required in order to achieve the objectives set up by the management.
In the first part of this case we will look at the general term; strategic marketing and
set up fictious examples of how a company in the automotive industry would deal
with strategic marketing and look at the tools available to the marketing department
and how they are implemented.
1
Oxford Advanced Learner's Dictionary
Page 6
1.1
Strategic Marketing in the automotive industry
Being a multinational company like BMW you need a strategy for virtually prior to
make a decision and this applies to marketing as well. The company has the past two
decades developed from an international company to a global player, where the set
of standards are different and the requirement for setting up a marketing strategy has
changed.
We have decided in this case to analyze the decisions behind launching certain
products; such as the roadster; the Z Series and the X Series, which meant that
BMW for the first time in its history ventured into new segments normally being
dominated by other manufactures.
The decision to leave the traditional segment where BMW had for years been
successful and diversify the product line will be analysed and in the introduction we
will try to cast a light on the tools and means behind such decisions.
In the middle of the 80's BMW decided to build a new car; the roadster Z1 and later
on the Z3 and Z4 followed and in the Off Road segment BMW introduced the X
Series.
The marketing department were deeply involved in the process of providing
information's relevant for the management of BMW; giving the management all the
data required in order to decide, what segments could be served by BMW.
Gathering information's from all major markets and from consumers; figuring out what
the competition were selling, who would be a potential customer, what do the focus
group what, what price would they be prepared to for a similar BMW product, what
features would the car need in order to a success, how do we meet their demands,
expectations and desires.
All these information is gathered by the marketing department using several tools;
ranging from interviews within their own customer base and gathering information's
from the customer buying a car from the competition.
Page 7
Looking closer at the process involved on behalf of the marketing department, we will
have to look at the entire process.
1.2
The strategic marketing process
The strategic marketing process entails 10 steps:
Phase 1 ~ Goal Setting
·
Defining the mission
·
Defining the objectives
Phase 2 ~ Situation Review
·
Implementing a Marketing audit
·
Performing SWOT analyses
·
Analysing the results of the SWOT analyses
Phase 3 ~ Strategy
·
Marketing objectives and strategies
·
Estimate the expected results
·
Identify the alternatives
Phase 4 ~ Allocation of resources and monitoring
·
Set up a budget
·
Implement the a detailed plan for the first year
Page 8
1.3
The automotive industry's mission and strategy tools
In the automotive industry the process applies as well, in the case of BMW wanting to
gather information's about a market not served by BMW or launching a new product
within a product segment; they start out defining their mission.
Looking at how the marketing division gather their information's, we will have to look
at the tools at hand.
1.3.1 The Nine Cells Model
There several recognized tools in the field of marketing being used for gathering or /
and analysing data and information's about the market, the customers, the products
and the behaviour of the market
2
.
High
Low
Average
Average
High
Low
A
tt
rac
tiv
e
n
e
ss
o
f t
h
e br
a
n
ch
Strength of competition
invest
disinvest
consolidate
There is a handful of tools always being used; such as 9 cells model, originally set up
by McKinsey Consulting during the cooperation with General Electric in the 1970's.
The "9 cells model" was introduced as a tool for analysing the vast portfolio of
2
Scholten, Marketing Strategy Presentation at the VWA Essen
Page 9
Strategic Business Units (SBU). It was soon to be known as the GE matrix or 9 Cell
model. There is a strong similarity to the Boston Consulting Group (BCG) growth /
share matrix, but the GE matrix tries to improve on the BCG matrix in several ways;
·
The BCG matrix has only four cells, whereas the McKinsey has 9 cells
·
The GE matrix generalizes the axes as "Industry Attractiveness" and
"Business Unit Strength" whereas the BCG matrix uses the matrix growth
rate as a proxy for industry attractiveness and relative market share as a
proxy for the strength of the SBU.
1.3.2 SWOT Analysis
Another classic tool is the SWOT analysis; it is known beyond the Marketing and
Sales department
3
.
Strengths
Weaknesses
Threats
Opportunities
SWOT Analysis is a very effective way of identifying the Strengths and Weaknesses,
and of examining the Opportunities and Threats facing a business. Carrying out an
3
Scholten, Marketing Strategy Presentation at the VWA Essen
Page 10
analysis using the SWOT framework helps to focus the activities into areas where the
company or SBU are strong and where the greatest opportunities lie.
To carry out a SWOT Analysis write down answers to the following questions. Where
appropriate, use similar questions:
Strengths:
·
What advantages do you have?
·
What do you do well?
·
What relevant resources do you have access to?
·
What do other people see as your strengths?
Consider this from your own point of view and from the point of view of the people
you deal with. Don't be modest. Be realistic. If you are having any difficulty with this,
try writing down a list of your characteristics. Some of these will hopefully be
strengths!
In looking at your strengths, think about them in relation to your competitors - for
example, if all your competitors provide high quality products, then a high quality
production process is not strength in the market, it is a necessity.
Weaknesses:
·
What could you improve?
·
What do you do badly?
·
What should you avoid?
Again, consider this from an internal and external basis: Do other people seem to
perceive weaknesses that you do not see? Are your competitors doing any better
than you? It is best to be realistic now, and face any unpleasant truths as soon as
possible.
Page 11
Opportunities:
·
Where are the good opportunities facing you?
·
What are the interesting trends you are aware of?
Useful opportunities can come from such things as:
·
Changes in technology and markets on both a broad and narrow scale
·
Changes in government policy related to your field
·
Changes in social patterns, population profiles, lifestyle changes, etc.
·
Local Events
A useful approach to looking at opportunities is to look at your strengths and ask
yourself whether these open up any opportunities. Alternatively, look at your weak-
nesses and ask yourself whether you could open up opportunities by eliminating
them.
Threats:
·
What obstacles do you face?
·
What is your competition doing?
·
Are the required specifications for your job, products or services changing?
·
Is changing technology threatening your position?
·
Do you have bad debt or cash-flow problems?
·
Could any of your weaknesses seriously threaten your business?
Carrying out this analysis will often be illuminating - both in terms of pointing out what
needs to be done, and in putting problems into perspective.
SWOT may also be applied analyze the competition. A start-up small consultancy
business might carry out the following SWOT analysis:
Page 12
Strengths:
·
We are able to respond very quickly as we have no red tape, no need for
higher management approval, etc.
·
We are able to give really good customer care, as the current small amount of
work means we have plenty of time to devote to customers
·
Our lead consultant has strong reputation within the market
·
We can change direction quickly if we find that our marketing is not working
·
We have little overhead, so can offer good value to customers
Weaknesses:
·
Our company has no market presence or reputation
·
We have a small staff with a shallow skills base in many areas
·
We are vulnerable to vital staff being sick, leaving, etc.
·
Our cash flow will be unreliable in the early stages
Opportunities:
·
Our business sector is expanding, with many future opportunities for success
·
Our local council wants to encourage local businesses with work where
possible
·
Our competitors may be slow to adopt new technologies
Threats:
·
Will developments in technology change this market beyond our ability to
adapt?
·
A small change in focus of a large competitor might wipe out any market
position we achieve
Page 13
The consultancy might therefore decide to specialize in rapid response, good value
services to local businesses. Marketing would be in selected local publications, to get
the greatest possible market presence for a set advertising budget. The consultancy
should keep up-to-date with changes in technology where possible.
SWOT analysis is a framework for analysing the strengths and weaknesses, and the
opportunities and threats facing a company.
This will help to focus on the strengths, minimise weaknesses, and take the greatest
possible advantage of opportunities available.
1.3.3 The Boston Consulting Group growth share matrix
The Boston Consulting Group growth share matrix is a diagram of the normal
relationship of cash use and cash generation. It is widely known in the general public
due to the unusual names for the different squares within the matrix, such as Cash
cows, Dogs and Stars
4
.
G
row
th
o
f t
h
e m
a
rk
et strong
weak
high
low
Relative market share
Question marks
Dogs
Cash cows
Stars
0%
4
Scholten, Marketing Strategy Presentation at the VWA Essen
Page 14
Stars
Stars are in the upper left quadrant. They grow rapidly and therefore they use large
amounts of cash. However, since they are leaders, they also generate large amounts
of cash. Normally, such products are about in balance in net cash flow. Over time all
growth slows. Therefore, stars eventually become cash cows if they hold their market
share. If they fail to hold market share, they become dogs.
Cash cows
Cash cows are in the lower left quadrant. Growth is slow and therefore cash use is
low. However, market share is high and therefore comparative cash generation is
also high. Cash cows pay the dividends, pay the interest on debt and cover the
corporate overhead.
Dogs
Dogs are in the lower right quadrant. Both growth and share are low. Dogs often
report a profit even though they are net cash users. They are essentially worthless.
They are cash traps.
Question marks
Question marks are the real cash traps and the real gambles. They are in the upper
right quadrant. Their cash needs are great because of their growth. Yet, their cash
generation is very low because their market share is low. Left alone question marks
are sure losers. They can require years of heavy cash investment. Yet, if they do not
develop a leading market position before the growth slows, they become just big
dogs.
Yet question marks are very difficult to convert into stars. Increase in market share
compounds cash needs. The cost of acquiring market share doubly compounds the
cash needs. Question marks are sometimes big winners if backed to the limit. But
most question marks are big losers.
The growth share matrix is directly derived from the experience curve. The
experience curve is the means of measuring probable competitive cost differentials.
A difference in market share of 2 to 1 should produce about 20 percent or more
Details
- Seiten
- Erscheinungsform
- Originalausgabe
- Jahr
- 2004
- ISBN (eBook)
- 9783832481933
- ISBN (Paperback)
- 9783838681931
- DOI
- 10.3239/9783832481933
- Dateigröße
- 674 KB
- Sprache
- Englisch
- Institution / Hochschule
- Hogeschool Zeeland – Economics
- Erscheinungsdatum
- 2004 (August)
- Note
- 1,7
- Schlagworte
- focusing bmws
