Arvin C. CamachoNorwilyne Joy S. Garcia

Karla Mae S. JaladMM 230 - Marketing Management

University of the PhilippinesProf. Mita Angela M. Dimalanta

INDUSTRY: Automotive

COMPANY PROFILE:A German luxury vehicles, motorcycle, and engine manufacturing company founded in 1916. BMW owns Mini cars and is the parent company of Rolls-Royce Motor Cars. It is one of the best-selling luxury automakers in the world.

MISSION:

The BMW Group is the world's leading provider of

premium products and premium services for individual mobility.

VISION:

We are Number ONE. We inspire people on the

move. We shape tomorrow’s

individual premium mobility.

COMPANY POSITION:

BMW Group is now one of the ten largest car manufacturers in the world and possesses three of the strongest premium brands in the car industry.

COMPANY POSITION:

Aims to generate profitable growth and above-average returns by focusing on the premium segments of the international automobile markets. BMW’s brand is extremely strong and is associated with high performance, engineering excellence and innovation.

What are the pros and cons to BMWs selective targeting?

PROS CONSCreates a strong brand value which led to the belief that owning a BMW is a sign of lavish lifestyle andprofessional success

Failure to target the masses pose a threat in terms of revenue withcompetition from other automobile industries

Builds a strong reputation among customer groups particularly for a specific product area

Threat of substitute products

Boosts brand loyalty Limited profit options as cars are produced for specific classes in society

Recognises customer differences and identified their needs

Market segment is exclusive

Provides responsive service support

Diversifies firm's risks

Targets those who would likely purchase their product

Encourages customer loyalty

What has BMW done well over the years and where could it improve?

BMW creates cars whose style, design, and features fit the characteristics of their identified target groups. They maintained a strong brand reputation over the years by using a wide range of advertising tactics to reach their target market. Their strategy not only promoted brand loyalty but increased the company's production as well.

BMW faces risks in terms of revenue with competition from rival companies whose target market is less selective. BMW can improve sales if they expand their market to average income consumers with opportunities in developing countries. With the rapid change in the environment and the rise of competitors, they could boost their research to cope faster with current trends, improve services, and maintain loyal customers.

BMW sales slipped during the worldwide recession. Is their segmentation strategy too exclusive?No, the Group’s segmentation strategy is not too exclusive. In fact, their market segmentation worked to their advantage during the height of economic decline. The decline in sales is due to global economic crisis and not the loss in the target market. On the contrary, the Group’s segmentation strategy worked in their favor since they have targeted upper-class consumers who would not hesitate to buy luxury cars even in tough times. Expanding their market to the masses would have backfired because doing so might change the perception loyal customers regarding BMW’s brand value. It was a wise decision for the Group to stick with their loyal customers.

REFERENCES:

• Bloomberg. (2009, March 16). BMW Shifts US Strategy Towards Used Cars During Recession. Retrieved October 5, 2016, from Business Standard: http://www.business-standard.com/article/companies/bmw-shifts-us-strategy-towardsused-cars-during-recession-109031600006_1.html

• BMW. (n.d.). BMW Group. Retrieved October 5, 2016, from BMW Group: https://secure.bmwgroup.com/bmwgroup_prod/e/0_0_www_bmwgroup_com/unternehmen/historie/meilenstei ne/meilensteine.html

• Innovation Leader. (n.d.). BMW. Retrieved October 5, 2016, from Innovation Leaders:http://innovationleaders.org/pdfprofiles/BMW%20Profile%202007%20(HR).pdf?subject=BMW%20Company%20Profile

•Just Auto Editorial Team. (2010, January 29). GERMANY: BMW Sales Slipped in '09; Expects Volume Growth in 2010. Retrieved October 5, 2016, from Just Auto: http://www.just-auto.com/news/bmw-sales-slipped-in-09-expectsvolume-growth-in-2010_id102963.aspx

•Wikipedia. (n.d.). Retrieved October 5, 2016, from Wikipedia: https://en.wikipedia.org/wiki/BMW