Internship under Prof. Sameer Mathur

1. “The truth is that innovation is a key element for BMW’s
success in the premium market and one of the key
motivations to buy a BMW”
----- BMW Group
THE ULTIMATE
DRIVING MACHINE

2. MINI CASE ANALYSIS
CHAPTER 7: IDENTIFYING MARKET SEGMENTS
ANDTARGETS
MINI CASE: MARKET EXCELLENCE IN BMW

3. Evolution of BMW’s marketing
strategiesBMW founded as Aero-engine
manufacturing company in 1917
Motorcycle and passengers cars
Restrictions
b/o world war
Series of acquisitions & joint venture
First motorcycle model
BMW R32 in 1923

4. 4
Followed by…..
Dixi (1929)
315/1 (1934)
..success in international racing events b/o lightweight construction,
outstanding aerodynamics, high performance and elegance….
Company prestige crossed Germany
BMW 238 sports in 1936

5. Rainy Days……
In 1950’s despite sustained effort to emerge as
manufacturer of prestigious vehicle faced bankruptcy on
account of decline in motorcycle market
With the help of an industrial financer, Herbert Quandt
BMW was able to thwart takeover bid by Mercedes
Quandt exercised majority of BMW’s shares and initiated
restructuring exercise to bring company back on track
BMW 700, a small car, came as the much needed boost
boost and BMW regained its position in the market

6. As part of restructuring initiative, BMW focused on sports sedan leading to
the launch of its first of ‘New Range’ BMW’s in 1961
Greater emphasis on advertising & sales support, combined with
improving engineering and performance related aspects.
During 1970’s and 1980’s BMW expanded its operation in the USA Asia and
Australia… cars got perceived as more stylish brand than other German
brands like Volkswagen and Mercedes and became serious competitors to
these brands in the premium car business.

7. In 1989 BMW appointed Karl Gerlinger (master marketer) to lead
marketing division in the USA
Sales in the USA 1991…53,000 units. in 1992…. 66,000 units
Announced to set up new plant outside Germany … Spartanburg, South
Carolina (US) in 1992
In 1992 succeeded in outselling Mercedes in Germany
Acquired “ROVER” in 1994, production capacity increased by 3% to

8. By 2002 BMW significantly decreased the ‘time-to-market’ new
products and linked its revenue to the introduction of leading-edge
product
Focus on strengthening its position as market leader in the premium
segment
Adopted product offensive strategy,

9. reduced time b/w idea generation and product development,
complaints came down drastically,
i-Drive technology, Active Steering
Revenue in 2002 $49.5 billion (9.9% increase compare to 2001), profit
$2.36 billion (8.3% increase compare to 2001)

10. 10
The result…..

11. The Result…..
$29,400
$75,600

12. Product
BMW 3Series : Sedan, Coupe,
Convertible, Touring, Compact
BMW 5Series : Sedan, Touring
BMW 6Series : Coupe,
BMW 7Series : Sedan
BMW Z4 : Roadster
BMW X3
BMW X5
BMW M : Sedan
Mini One
Mini Cooper
Price
BMW price range are
from £ 16,000 to £
60,000
Place
Globally

13. Promotion
Same advertising company WCSR since 1979
James Bond film - The World Is Not Enough (Z8 before its launch)
Austin Power 3-Goldmember -( Mini cooper)
“VIRAL MARKETING”
BMW Films (e.g.. ‘The Hire’ - increased sales
by 12.5% in 2001 compare to 2000
Marketing campaign ‘The Ultimate Driving Machine’
Golden Eye: BMW Z 3
Tomorrow Never Dies: BMW 750iL, R1200 Motorbike

14. Geographic
Region Globally
Density of area Urban
Demographic
Age-above 30
Income-$ 25,000 and above annually
Occupational-professional, Businessmen
Psychological
Personality Extrovert, Novelty seeker
Learning involvement high
Perception low risk
Attitude positive

15. Psychographic
Lifestyle segmentation ---status
seeker
Socioculture
Social class ---middle
and upper
Behavioral
Benefit ---safety,
elegance, technology
Loyalty status ---
Readiness stage ---aware,
interested

16. What are the pros to BMW’s selective target
marketing?
PROS:
 Could give customers various types of designs, size, price and style
choices.
 Specific type cars for specific class people ex.1series for those who
earlier avoided BMW for premium price and launched X5 to ”upper
liberals” for their active life style and big famillies

17. What are the cons to BMW’s selective target
marketing?
CONS:
 Cars only for the ones who could afford
 Sales Dipped During Recession.

18. What has the firm done well over the years and where
could it improve ?
ATTENTIONTO NEEDS:
 After knowing customers desire of having cars of design,
size, space and style choice immediately launched many
new products x5,x3,x1 etc.
IMPROVEMENTS SUGGESTED :
 It could have come up with Lower Segment of Cars where
the Market is bigger with more opportunities especially in
Developing Nations like India, Brazil , and south ASEAN
countries.

19. BMW’S sales slipped during the worldwide recession in 2008
and 2009 . Is it its segmentation strategy too selective ?Why
or why not?
 The segmentation strategy of BMW is too selective,
 It’s target segments are mainly the “Modern
mainstream” & “Post moderns” high income group
people.
 The BMW is an epitome of Luxury, Loyalty , Success
and High esteem hence the segmentation strategy
has to be selective.

21. DISCLAIMERCreated by Reema Mathew, IIT Madras, during a marketing internship by Prof.
Sameer Mathur, IIM Lucknow.