You are on page 1of 90

REGIONAL COLLEGE

OF PROFESSIONAL STUDIES & RESEARCH


Affiliated to MJP Rohilkhand University, Bareilly
Pilibhit Bypass, BAREILLY (UP)

PROJECT ON

MARKETING STRATEGY OF BMW

2015 16

SUBMITTED BY :
AMIT KUMAR
B.COM ( HONS )2nd YEAR

REGIONAL COLLEGE
OF PROFESSIONAL STUDIES & RESEARCH
Affiliated to MJP RohilkhandUniversity , Bareilly
PilibhitBypass , BAREILLY (UP)

CERTIFICATE
THIS IS TO CERTIFY THAT THE MARKET SYRVAY REPORT TITLED

MARKETING STRATEGY OF BMW


HAS BEEN PREPARED BY

AYUSH GUPTA
AS PER REQUIREMENT OF CURRICULUM OF B.COM (HONOURS)-2Nd
THIS WORK IS AS PER GUIDELINES LAID OUT FOR THE SAME AND IS
WORTHLY OF APPROVAL.

Date:
20/Feb/2016

Signature of Panel of Teachers


Dr. Anjali Chaudhary
Dr. Priya Verma
Miss Surya Lata

REGIONAL COLLEGE
OF PROFESSIONAL STUDIES & RESEARCH
Affiliated to MJP RohilkhandUniversity , Bareilly
PilibhitBypass , BAREILLY (UP)

ACKNOWLEDGEMENT
I AM EXTREMELY THANKFUL TO ALL THOSE WHO HAVE HALPED ME IN COMPLETATION OF MY
PROJECT

MARKETING STRATEGY OF BMW


MY PROJECT WOULD NOT HAVE COMPLETED WITHOUT THE ENCOURAGEMENT , GUIDANCE AND
MOTIVATION PROVIDED TO ME BY

Dr. Anjali Chaudhary


Dr. Priya Verma
Miss Surya Lata
LASTLY, I WOULD THANK ALMIGHTY GOD FOR GIVING ME
COURAGE, WILL ANDINTELLIGENCE TO COMPLETE THIS WORK.

Date:
20/Feb/2016

Signature of Student
Amit Kumar
B.Com. (Honours) 2nd Year

CONTENTS
1)
2)
3)
4)
5)
6)

Company Profile
Reason for Entry into Indian markets
Strategic Objective
Visions
Mission
Marketing strategy

7) Dealership Network Strategy


8) Product Line Modifications
9) Market Share and Performance
10) BMW India Market Competition
11)

The Five Forces Model


12)

SWOT Analysis

13)
14)
15)
16)
17)

Operations at BMW - The Assembling Process


Key Inferences about the Operations Process
Quality at BMW
The Purchasing process at BMW
BMW Human Resources Policy

18)

Brand Building and Sustenance

19)
20)
21)
22)
23)
24)

Corporate Social Responsibility


Management at BMW India
Organization chart of BMW India
Key inferences from the Organization Chart
Basic principles followed by BMW
Future Expansion Plans

Executive Summary
In this report a marketing plan is formed for BMW Automobiles in GURGAON, the report
starts off with a short introduction to marketing and the company.
BMW is a leader in the premium luxury car market in the GURGAON; the company has
shown increasing sales in the last two years and has almost 10% of the GURGAON car
market share. The reason for this success is the diverse range of cars that BMW has to
offer. It consists of the BMW brand, Mini and the Rolls Royce. However all three of them
are successful products of BMW Automobiles and are discussed in this report; more focus
is given to the BMW brand.
The reason so far for the success of the company is their accomplishment in the companys
core strategy, product development. BMW over the years have created cars and
successfully launched them into markets, but times are changing now as competitors like
Mercedes are getting into new markets and trying to win new consumers. BMW has to
counter such moves by sticking to its core strategy yet entering new markets. This is the
way the company is going to achieve its mission of becoming the the world leading
provider of premium products and premium services for individual mobility by 2020.
Introduction to Marketing
Marketing is something that affects every one of us every waking moment of our lives; it is
the management process for identifying, anticipating and satisfying customer requirements
profitably (Chartered Institute of Marketing)
Introduction to the Company
BMW (Bavarian motor works) is a German automobile, motor cycle and engine
manufacturing company which was founded in 1917. The majority of the stake within the
company is owned by strategic investors from all over the world. BMW is mainly seen as a
premium luxury cars manufacturer targeting the rich and upper class society.

Corporate Objectives:
Corporate Objectives are simply what the business wants to achieve, they are those that
relate to the business as a whole. They are usually set by the top management of the

business and they provide the focus for setting more detailed objectives for the main
functional activities of the business. BMWs corporate objectives are also simple and clear,
they want to achieve a earning before interest and tax margin of 8% in 2012, which is
similar to the one they achieved in 2011. Moreover the company wants to achieve a return
on equity ratio of 18% in the financial year 2012 (source BMW blog).
The other long term aims of the company are to have efficient dynamics in all cars by 2020
and to be the world leading provider of premium products and premium services for
individual mobility by 2020, the latter is also the mission statement of the company. (BMW
Annual Report)
Marketing Audit
Macro Environment (PESTEL)
The macro environmental factors of an organization are the external and the non
controllable aspects of an organization, which can be best, understood by using the PEST
analysis.
BMW is a vast organization and thus a vast majority of external factors affect the running
of the company which are discussed below
Political:
In the recent past the GURGAON and EU laws have recognized the fact that the car
industry is a major contributor to the emission of Co2 in the environment, recent studies
have shown that 22% of the overall Co2 emissions have been caused by road transport of
which 92% are from cars. This has had an immediate impact on BMWs automobile
industry. The pressure of governments for greener technologies and environmental friendly
cars has led BMW to invest in such technologies, although this has raised the
manufacturing costs for BMW, it has also created a positive image in the minds of its
customers by reducing the carbon foot prints which is created on the environment.
This has led to BMW launching its first car running on hydrogen in 2007, which produced
very less Co2 emissions. This greener image is also being made prominent by the new
engine technology called the Efficient Dynamics, which BMW launched recently.( BMW
BLOG)

Economical:
The recent financial crisis has had a huge impact on all businesses throughout the
GURGAON, consumer purchasing power has fallen significantly this is the reason why in
2008 BMW had a profit before tax of 351 million Euros whereas in 2011 the profits have
increased to 7.3 Billion Euros.( Annual Report 2012) However In the GURGAON the
recession is still growing stronger, as the country is facing is facing its first double dip
recession since 1975 so it is likely that these rising profits will come to a fall. (Daily mail)
The second major factor regarding BMW economical climate is that of rising oil prices, last
month a barrel of crude oil had soared up to $122. This has raised the cost of sales for the
company as it has risen by 9.5% when comparing the 2010 and 2011 financial statements.
However it is worth mentioning that profits for BMW automobiles has increased by 75% in
comparison with 2010. (Annual report 2012).
Lower interest rates in the GURGAON are significantly affecting the consumers savings
which is going to have an impact on BMW as the less the consumers will have to spend the
lesser the sales for BMW, this is the reason why many economist and financial analysis
predict a fall in sales for luxury items in 2012. (The World in 2012)
Social
Hofstede (1980) defines culture as the collective programming of the mind which
distinguishes the members of one human group from another.
The GURGAON population is expected to be increase by 8 million by the year 2029 when
in comparison to 2012. The breakdown of this increase shows that the population is shifting
towards more life expectancy and thus to an older generation. This shift will cause BMW to
ponder upon its green technologies as the consumer will likely prefer a greener
environment. (Market Oracle)

Technological

Technology has driven many aspects of societal development, business and marketing over
the centuries, however the technological revolutions of the last 100 years have also led to
the demise of various industries. For e.g. the typewriter has ceased to exist.
BMW has to constantly look after these changing environments, the BMW efficient
dynamics is doing well in the markets but the organization should always be ready for
change and one step ahead of its competitors. Recently Mercedes Benz launched an advert
of its invisible car, which emits zero emission and Mercedes equipped one side of the car
with sheets of LEDs that show streaming images captured by a Canon 5D Mark II camera
attached to the other side of the car. The car blends into the background, making it nearly
invisible. Although the car will not go in production until 2014 but his promotional
campaign has caught attention of consumers throughout the world. BMW should critically
analyze this situation and improve its efficient dynamics and hydrogen fuelled cars to
respond to this technological advancement. (News. Discovery 2012).
Internal Marketing Audit
The micro environment can be best described as the environment that is most closely
linked to the organization (Grocutt 2004)
The internal environment of an organization can be best understood by using the Porter
five forces model.

Threat of New Entrants- Low

The Automobile industry requires high amount of capital expenditure for a new
organization to enter the market. BMW has a strong foothold in the market and is unlikely
that it would be worried about new entrants to the market as BMW holds both tacit and
explicit knowledge of the market which no new organization would gain early.
Threat of Substitute Products- Medium
BMW customers are loyal to the brand, the ones who are using the BMW cars shall not be
willing to switch to competitors as they are used to the drive and comfort of BMW,
However people now have become health conscious and some consumers may in fact find
walking more beneficial for their health and just taking public transport to get to work.
Bargaining Power of Customers- Medium
Individual customers can gather a lot of information about the production price of a BMW
and can thus negotiate prices. On average a BMW car cost 50% of its market retail price.
(Guardian 2009)
Bargaining power of suppliers- High
The reason that supplier power is high because BMW relies on quality products from its
suppliers making BMW so valuable, moreover supplier switching cost is high.
Secondly BMW follows Just in time production so good relations with suppliers are very
important for the company.
Competitive Rivalry Within the industry- High
The automobile industry is one of the most competitive industries, the reason being that the
industry has low market growth rate. One of the fiercest rivals for BMW in the GURGAON
is Mercedes and the Volkswagen Group. Moreover the exit cost for car manufacturers are
also very high which maintains the competition within the industry.

Company Profile

Headquartered in Chennai
BMW India Private Limited is a 100% subsidiary of the BMW
Initial investment in India is 1.1 billion Indian Rupees
Employed around 200 people

Models
Assembled/Manufactured Locally
BMW 3 Series (330i, 320i, 320d Corporate Edition and 320d Highline)
BMW 5 Series (523i, 520d, 525d and 530d)
BMW X1 (To be launched soon)
Imported
BMW 5 Series (535i CBU)
BMW 5 Series Gran Turismo (Limited Edition)
BMW 6 Series (650i Coup and 650i Convertible)
BMW 7 Series (740Li, 750Li, 760Li and 730Ld)
BMW X3 (X3 xDrive25i, X3 xDrive20d)

BMW X5 (X5 xDrive50i and X5 xDrive30d)


BMW X6 (X6 xDrive50i and X6 xDrive30d)
BMW X6 M
BMW M3 (Coup and Convertible)
BMW M5
BMW M6 (Coup and Convertible)
BMW Z4 (sDrive35i Roadster).
Reasons for entry into Indian Market
The luxury segment is puny in India, accounting for no more than 0.03% of the
market. Nevertheless, high-end carmakers see it as crucial to build a presence here
due to the market's anticipated growth.
In 2000, only five in every 1,000 Indians owned a car; by 2010, the number is
expected to have risen to 11 per 1,000. By 2010 there could be 13 million cars on
India's already crowded roads, up from just 5 million in 2000.

"We want to benefit from this growth potential, but we also want to make an active
contribution to this growth," said Norbert Reithofer, chairman of BMW's board of
management.
"Chennai has a developed infrastructure and it benefits from having parts suppliers
nearby," added Frank-Peter Arndt, BMW board member in charge of production.
13 potential production locations were analyzed for setting up the production plant in India.
Chennai was chosen as the most feasible option because of the following reasons:

Automobile manufacturers
Automotive suppliers
Qualified labor
Cost balance for production location
Infrastructure International Airport, Sea Port, Road Network

Strategic objective
The BMW Group is the leading provider of premium products and premium services for
individual mobility.
Vision
Uniqueness through diversity, Leadership, taking Risk, courteous

Mission
"To become most successful premium manufacturer in the car industry"
Marketing Strategy
BMW India studied the Indian markets and found it to portray immense dynamism
and this is how BMW formulated its marketing strategy.
BMW India decided to stand their ground in a fiercely competitive environment with new
ideas and the strength to promote our new products. In absolute terms, India cannot
compete with other high-volume single markets yet. But, the future belongs to India. If you
want to benefit from the dynamics of the Indian market later, you need to act today. This is
what they did. They were prepared to meet the challenges head-on to ensure their
company's success. These qualities enabled them to weather stormy conditions and
continue to invest in our future. They were able to anticipate trends and that gave them an
edge.
Their strategy has been to embark on an aggressive product offensive with rapid market
expansion through greater customer intimacy. They have addressed these through
competency-enhancement across all levels seeking new business opportunities. As pioneers
in bringing luxurious dealerships to India, they set a decisive course by setting up BMW
dealerships of international standards across all metros. They have set very high standards

in service quality and customer care in India, which meet the expectations of their
customers. And this is exactly how they position themselves to redefine luxury, focusing on
individuals, recognizing future challenges, promoting creativity, and being the leading
supplier of luxury products and services for individual mobility. They always concentrate
on their strengths and thus on the
Implementation of the luxury claim which they convey with each of their vehicles. They do
not make compromises. This has been their strategy in India, where they currently have 16
BMW dealer facilities. As we embark on the next phase of our dealer network strategy,
BMW India will further expand operations by establishing its presence in 10 more cities.

Communication, Pricing and Distribution


Most of the BMW communication takes place through print media in magazines and
newspapers. This is supported by communication through TV advertisements and point of
sales promotion. Now days a good company has a state of the art web portal. BMW
websites are highly informative, interactive and a pleasure to watch. One can get any
amount of detailed information regarding the prices, features, retailers, support services,
etc. There are company specified retailers and distributors throughout the country who are
in constant touch with the parent and comply implicitly. Dealers also have round the clock
servicing and repair. BMW also has a used car portal where one can choose and buy his/her
appropriate model.

Dealership Network Strategy


BMW India is the pioneer in bringing luxurious dealerships to India. BMW India has set a
decisive course in India by setting up BMW dealerships of international standards across
all metropolitan centers of the country. BMW India has set very high standards in service
quality and customer care in India. The present dealer network covers 95% of the sales
potential of the premium car segment in India. BMW Indias dealership Network Strategy
comprises of two phases as mentioned below.

Phase I
Phase I of the Dealer Network Strategy included establishment of 12 dealers covering
major metropolitan centers of the country by the end of 2009. An aggressive plan was
chalked out and implemented for completion of Phase I of the dealer network, much ahead
of schedule (Phase I was completed by end 2008).
Owing to an exuberant growth potential, BMW India has further chalked out Phase II of its
dealer development strategy to support its plans

Phase II
In Phase II, BMW India will further expand operations in 10 additional cities in India.

Presently, BMW India is present at 17 locations in the Indian market; BMW Studio (New
Delhi), Deutschen Motoren (New Delhi), Deutschen Motoren (West Delhi), Bird
Automotive (Gurgaon, NCR), Navnit Motors (Mumbai), Infinity Cars (South Mumbai),
Krishna Automobiles (Chandigarh), Navnit
Motors (Hosur Road, Bangalore), Navnit Motors (Millers Road, Bangalore), KUN
Exclusive (Hyderabad), Kun Exclusive (Chennai), Bavaria Motors (Pune), OSL Prestige
(Kolkata), Parsoli Motors (Ahmedabad), Platino Classic (Kochi), Kun Exclusive
(Coimbatore) and Sanghi Classic (Jaipur).
BMW dealerships presently display the BMW 3 Series and BMW 5 Series that are
produced at the BMW Plant Chennai. BMW dealerships also display the BMW 6 Series,
BMW 7 Series, BMW X3, the BMW X5, the BMW X6, BMW Z4, and the BMW Gran
Turismo which are available in the country as CBUs (Completely Built-Up Units). The
BMW M3 Coup, BMW M3 Convertible, BMW M5, BMW M6 Coup, BMW M6
Convertible, BMW X6 M, BMW 6 Series Individual and BMW 7 Series Individual can
also be ordered at BMW India dealerships.

Product Line Modifications


BMW entered the Indian car market in the year 2006 with the launch of its first BMW
model. The company established a sales subsidiary in Gurgaon in 2006 to develop its dealer
network. In 2007, BMW set up its first state of the art manufacturing unit in Chennai.
According to the Society of Indian Automobile Manufacturers (Siam), BMW India
registered growth of 12.76% at 1,016 units from April-July 2009. However they have
extensive expansion plans and hope to bag a sales figure of 3,000 units in 2010. This was
planned to do by modifying the product line according to the Indian markets.
BMW Initially launched the 3 concept cars in India- 3 Series, 5 Series and 7 Series which
were priced as follows:
3-Series Rs. 36-38 L
5-Series Rs. 45-50 L
7-Series Starting Rs. 1.08 Cr.
The company further studied the Indian market in depth and realized that the models
launched do no suit the Indian roads as well as the Indian mentality. Therefore, the
company planned to modify models as per Indian markets. The new models of BMW were
altered with some features such as the I-drive function; the 7-Series was no more a

customized model; standardized interiors and many such modifications. Thus, the company
was able to cut down prices. The new models were priced as follows:
3-Series Rs. 27-33 L
5-Series Starting Rs. 39 L
7-Series Rs. 80-90 L
Luxury car maker BMW India achieved 100 per cent growth in its car sales this year.BMW
India have already sold 2,703 cars till November and aims to sell 2,800 by the end of this
year against 1,387 last year, companys president Peter Kronschnabi told reporters.

MARKET SHARE AND PERFORMANCE


BMW India Ranks as the Number One in the Luxury Car Segment in India
BMW India Achieves Leadership Position by Increasing its Market Share in the Luxury
Segment of the Indian Automotive Market to over 40%
BMW India is the number one in the luxury car segment in India and portrays a symbol for
dynamic and forward striving people.

BMW India increased its market share in the luxury segment of the Indian automotive
market to over 40% in 2009 (from 9% at the end of 2006). With 3619 cars delivered to
customers in the calendar year 2009, BMW India has achieved the highest sales by a
manufacturer in the luxury car segment in a year till date.
In 2009 BMW India sold
-- BMW 3 Series 1155 units
-- BMW 5 Series 1590 units
-- BMW 6 Series 28 units
-- BMW 7 Series 350 units
-- BMW X3 101 units
-- BMW X5 287 units
-- BMW X6 83 units

-- BMW Z4 25 units

2007, 2008 and 2009 were demanding years for BMW India and, at the same time, the
most successful market entry for BMW in any country recently. Various activities initiated
during this period have provided BMW India with a solid basis to develop a strong
foundation.

BMW India Market Competition


Talking of competition prevailing in the Indian market for BMW India, we talk of
companies like Mercedes, Audi, Volkswagen, Ferrari, Aston Martin and Porsche. Ferrari,
Aston Martin and Porsche being car manufacturers are not considered tough competitors to
BMW India because these brands have much higher profile in various other markets of the
world and will take time to establish themselves in the Indian market. Moreover, Ferrari
struck the Indian markets in 2010 and, Aston Martin and Porsche plan to do that next year.
Thus, we can say, major competitors to BMW India are Audi and Mercedes.
BMW has been giving equal fight to both the car manufacturers since its launch in the
Indian market.

Story till 2014


German luxury car maker BMW had left behind its closest competitor, Mercedes-Benz, by
selling a larger number of cars in the luxury segment in 2009. Mercedes-Benz has so far
been the undisputed leader in the luxury car segment in India. The company had started
local assembly operations almost a decade ago, thus making it difficult for competitors to
beat its prices. Recently, however, both BMW and Audi have started local operations in the
country. In January 2009, BMW managed to sell 270 cars, as against the 79 units sold by
Mercedes, and 244 units as against Mercedes 226. Audi is also fast catching up, having
sold 109 units.
Mercedes-Benz CEO Wilfried Aulbur told media persons that BMWs increased sales in
recent months was attributable to the heavy discounts it was offering. After the launch of
the new 3-Series, inventories of the older model were cleared with the help of discounts.
Taking a direct shot at BMW, Aulbur said that Mercedes was against stuffing dealers
with huge inventories to increase numbers and that ideally manufacturers and dealers
should both get a good deal in the business. He also said that Mercedes-Benz was confident
of maintaining its edge by launching latest models and strengthening sales and service
network.

Current scenario

The battle between the Germans is getting serious in India. BMW caught Mercedes Benz
napping and went past the three pointed star last year. However, with the launch of the new
E-class, C-class Executive and the supercar SLS AMG, Mercedes Benz has taken the lead
over BMW and Audi in the first seven months of 2010. Mercedes sales jumped by a
massive 79.31% while BMW and Audi witnessed 35.35% and 56.5% respectively in the
period Jan-Jul 2010 compared to the same period last year. Mercedes Benz shifted 2,921
units compared to 2,718 for BMW and 1,535 for Audi so far in 2010.

Future Anticipation
We still have three months left in 2010 and the ultimate winner will depend on how well
the market receives the new F10 5-series and the upcoming BMW X1. Even the all new X3
and 6-series could come before the end of the year tilting favour towards BMW. In
comparison, Mercedes Benz does not have any big launches coming up this
year. BMW has just got a new India head and everyone is eagerly looking at him what new
strategy it comes up with. Audi has launched their all new A8 this year as well. Their
competitor to the X1, the Q3 is under consideration for India as well.
So who will eventually win in 2010? We predict that BMW will take over sales as they
have a slew of launches in the second half of this year. The new 5-series has also got off to
a good start beating the E-class in its first month. Audi are getting to the top and they may
give Mercedes and BMW serious threat next year.

Audi as a competitor
The Audi Q3 will go into serial production in 2011 in Spain and once that happens, the
cross coupe crossover from Audi to take on German rival BMW might just make just make
it to Indian shores too. Now, plenty of stuff happening at Audi India seems to suggest just
this. First things first, Audi India is nowhere near Mercedes Benz India and BMW India
when it comes to car sales. This, despite of Audi having an excellent portfolio of world

class premium cars in its arsenal. Audi Indias weak links have been its pricing and its
brand awareness amongst the Indian premium car buying populace which is way lesser
than Mercedes Benz and BMW.
Also, Audi India being the latest of the entrant amongst the German car makers is clearly
not as aggressive a BMW India, which really has turned the heat on Mercedes Benz with a
slew of cheaper and in many cases better products. Audi India however has been content
playing a distant number three and so far hasnt done anything really, for it to move up and
out of this position. On the other hand, rivals like BMW and Mercedes Benz are chalking
out very aggressive plans to get into the INR 20-25 lakh segment with their offerings.
BMW India till now did not experience much competition from Audi, but the coming year
and beyond might not be the same. Audi, as read above has a better growth rate in terms of
sales. This could be the turning point for the luxury car segment in the Indian markets and
for Audi as well.

The Five Forces Model

Threats from
Potential entrants
Suppliers

Competitive

Bargaining power Rivalry

Buyers
Bargaining power

Threats from
Substitutes
Porter explains that there are five forces inherent in a market, which will jointly determine
the intensity of competition and profitability of BMW and the automobile industry. The
first is the threat posed by new entrants, the high capital expenditure and confidence of
customers represent significant barriers to entry and the market is also sensitive to
reputation. However, the emergent of low cost manufactures do pose a significant threat.
There is an opportunity in the low price/ low economy (fast) sector. The second is the
threats from substitutes, as there are many make and model of other premium branded cars,
hence, Mercedes Benz, Audi etc. The third force is the threats from the bargaining power of
buyers, is this strong for both BMW and the entire automobile industry with a large number

of alternative suppliers, hence, the aggressive pricing strategy. This results in a very strong
competitive rivalry in the industry. This is intensified as a result of little or no
differentiation in the basic product offered. Finally the threats from the suppliers bargaining
power, this is fairly low in the automobile industry, due to dual sourcing strategies, using
arrange of alternative sources of supply for parts.
The five forces analysis gives an improved understanding of the degree of competition
within the business environment. The analysis shows that the automotive industry is highly
competitive, with buyers possessing and exerting a very powerful influence to the large
number of substitute brands available to them.

SWOT Analysis
An Internal and corporate analysis in terms of strength, weaknesses, opportunities and
threats (SWOT) will assist in gaining an understanding of where BMW is currently in
terms of strengths and where improvement is required within the business and what outside
environmental threats it may face as well as what new opportunities are available to the
company in the short and medium term.

STRENGTHS
Diverse ranges of
Products
Strong Cash Flow
Position
Increase turnover
and trading profits
Strong Balance
Sheet
World's leading

OPPORTUNITIES
New Products
Innovation & Alliances
Customers demand change to more
comfortable and relevantly cheap cars
Diversification
New Technologies in Automobiles

Premium Quality
Automobile
Manufacturer
Brand Awareness
Human resources
Capabilities to turn
resources into
advantages
WEAKNESSES
Perception of High

THREATS
New & existing competition
Volatility in Price of Fuel
New legislations
Consequences of the oil crisis
Economic recession
Market shift to globalization
Takeover bids
Far-East (Japan, Korea, etc.) Automobile

issues: Pollutions
Buyer sophistication

and knowledge
Substitute products

companies expansion
Extremely high competition for customers and

Prices
Customer disinterest
Environmental

or technologies

resources

Operations at BMW - The Assembling Process

Step 1234

Key Inferences about the Operations Process


1. Design of processes
1.1 it essentially means the various choices that we make with respect to the flow of
parts in a manufacturing system
1.2 the 3 important aspects that influence process are volume, variety and flow
1.3 volume indicates the average quantity of products produced in a manufacturing
system
1.4 variety refers to the number of alternative products and variants of each product
that are produced in a manufacturing system
1.5 flow provides an understanding of how the components and material in an
operations system get transformed from the raw material stage to finished goods
stage
1.6 BMW follows a Continuous Flow System. The reasons for the same are:
1.6.1 The Assembling Process, as explained above, is characterized by
streamlined flow of processes in the operating system
1.6.2 The production process is sequential and the required resources are
organized in stages
1.7 In the category of Continuous Flow System, BMW follows a Mass Production
manufacturing system. The reasons for the same are:
1.7.1 the volume of products is high
1.7.2 the number of variations in the final product is low
1.7.3 each product flows into each department in a streamlined fashion
1.7.4 within each department, there is an orderly flow of raw material and
component
1.7.5 in the context of planning and scheduling of activities , this type of
structure is called as flow shop

2. Layout
2.1 it deals with physical arrangement of various resources that are available in the
system with an objective to improve performance of the operating system thereby
providing better customer service
2.2 BMW adopts a Product Layout. The reasons for the same are:
2.2.1 the resources are placed to follow the sequence dictated by the product
2.2.2 the process is standardized
2.2.3 simpler operational control is possible
2.2.4 high volume is achieved

3. Cycle time
3.1 The cycle time for making a BMW is 14 Hours (2 working days)
3.2 The entire assembling process is explained above
Quality at BMW
Garvin had proposed 8 quality dimensions and BMW seems to follow all of them. The 8
dimensions followed by BMW are:
1.
2.
3.
4.
5.
6.
7.
8.

Performance
Features
Reliability
Conformance
Durability
Serviceability
Aesthetics
Safety

The products offered by BMW undoubtedly perform outstandingly on each of the


dimensions mentioned above.
The Quality Principles followed by the company are:

a. Prevention instead of Reaction


Forceful redirection of the quality activities from after the fact fault correction to
anticipatory fault prevention
b. Conserve best practice, safeguard new techniques
Assuring best practice by product and process design kits, safeguarding innovation
and changes
c. Mature concepts little changes
Influence the design of processes and indicators to be able to evaluate the product
and process maturity at any time
d. Quality adds value
Initiation of projects and initiatives to achieve the quality targets while considering
cost and return principles
e. Our concepts lead to top level customer satisfaction
Transfer of customer feedback to concrete product and process measures
f. Quality is a leadership task
As BMW creates value for money for its customers, it provides them with the best
possible services at the time of sale as well as after sale. Before any car is ready to be
dispatched for the showroom in different parts of the country, the car is taken through
various tests at the plant. A BMW model undergoes the followings tests:
Rolling and ABS Test
The performance of the vehicle is checked by rotating its wheels at a speed of 120-150
km/hr. the engine performance and gear box performance is evaluated. Lights are checked.
The vehicle is put into drive mode as well as manual mode to check performance

ABS means Anti lock braking system. The performance of all the 4 brake lines
corresponding to 4 wheels is checked while running the engine. The pumps and the
pressure levels are also checked.
Road Test
Before the road test begins, the seat covers are removed, the viper and engine compartment
are checked. The vehicle is made to run for the first time to check the parts setting. The
vehicle is driven to various test tracks to test its performance.
Sinusoidal track
The track is in sinusoidal waves. The vehicle is driven at a speed of 20 km/hr to check
whether the parts are welded properly or if any crack is there.
Cobble Stone Track
The vehicle is made to run on a track having stones to check if there are any loose parts. If
so, then it will make noise and the defect can be found out.
ABS Track
The vehicle is made to run on a track on which water has been sprayed. This track helps to
check the stability and control of a vehicle in slippery conditions.
S-Test

The vehicle is made to run in S-Shape to check the fitment of parts


Reverse Test
The vehicle is driven in reverse direction to check for missing parts and if any abnormal
noise is being produced during driving.
Water Test
The vehicle is placed in a water station for 8 minutes. The water is sprayed from all
directions on the vehicle. This test helps to find out any leakage in the vehicle.

After the water test, the vehicle is sent to the car wash area where it is completely washed
and dried. After finishing all these tests, the vehicle is sent to the covered parking area and
is considered to be ready for use.

The Purchasing process at BMW


BMW engages into 2 different kinds of purchase
a. Direct Material Purchase
This includes the Local Consumables Purchase, Technical Components Purchase.
Local Consumables Purchase includes Adhesive Tape, Assembly Lubricant,
Transmission Oil, and Sealing Compound
Technical Components Purchase includes Seat, Door Trim.
b. Indirect Material Purchase
This includes all the material that assists in the making of the automobile but is not a
part of the automobile. There are 2 kinds of purchase orders for indirect material
purchase. They are:
1. Standard Purchase Orders
These purchase orders are used for all those material which do not fall under the
category of frequent purchases.
For Example: Generators, Printer, Trolley, etc
2. Frame Agreements
These purchase orders are used for all those materials which are frequently
purchased. The Frame Agreement does not change for a minimum period of 6
months

Step

The General Purchasing Process Steps

Step
Step
Step
Step
Step
2Step
3Step
4Step
5Step
10
6Step
78 11
9

Request for Quotation (RFQ) should contain the following specification


a. The supplier must accept all BMW Payment terms and conditions
b. The delivery terns must be stated on the quotation
c. The quotation must be dated and stamped when received
Purchase Requisition (PR) must contain the following specifications
a.
b.
c.
d.

Supplier Name
Commodity required
Cost center
Value as per quote

Invoicing must contain the following specifications


a. Total price including base price, sales tax, service tax and excise duty
b. It must also include the currency of transaction

As read above, BMW India is known for its quality and creating value for money for the
customers, this is reflected through their purchasing strategy. Selection of suppliers for

BMW is done through a very formal procedure to avoid any sort of quality issues. Supplier
selection is based on the result of evaluation based on Supplier Performance Scorecard

The aspects covered in the Supplier Performance Scorecard are as follows:


Aspects

Maximum Points

Quality

35

Cost

25

Logistics

20

Management

20

Total

100

Considerations for the Quality Aspect


a.
b.
c.
d.
e.
f.
g.

No. of issues / volume of car set supplied


Count of PIS / Quantity Supplied
No. of repeat quality issues / No. of Quality issues
No. of VIN affected / No. of cars produced
Count of MCDR s / No. of cars produced
No. of VIN reworked / No. of cars produced
No. of Quality points at supplier end / No. of quality issues at BMW

Considerations for the Cost Aspect


a.
b.
c.
d.
e.
f.
g.

Timeliness in quote submission


Response to our queries
Cost break down and details of the offers
Cost escalation control plan
Productivity realization
Exchange rate review
Identify parts for further localization / new product initiative

Considerations for the Logistics Aspect


a. Packaging issues
b. Schedule adherence Timeliness
Considerations for the Management Aspect
a. TC Planning and smooth implementation without disturbing production
b. Invoicing and documentation issues

BMW Human Resources Policy


In response to a changing business environment BMW is being more business and
service focus. In the past decade the organization has become much more proactive,
dealing with new concepts to become more service and customer focus oriented. The
structure of the organization has been redefined to deal with the new ways of operating.
Organizational structure defines important relationship within the business for achieving
business objectives. At the same time it helps to define the new business culture within
BMW. Culture exists with the minds and hearts of BMW's employees and contributes to
business strategies of the organization. Therefore, BMW's human resources policies are
critical in the organizations structure, conduct and performance.

Competitive pressures on BMW and national economies have increased markedly in


recent decades. New competitions are emerging and forcing older companies to adopt or
reform to survive. Different structures affect the way in which human resources are
managed. BMW like all other businesses require the same basic human resources
activities like recruitment, development and training, appraisal and reward systems, and
control and feedback mechanisms. Organizational structures are influenced by culture.
Employees have strong feelings towards the organizations they work for. BMW India
has inherently a flat, less rigid structure. The McKinsey 7 'S' model is often used to
identify all the areas that make up an organization. Structure, Style, Staff are three such
areas.
BMW has an equal opportunities none sexual discriminating culture within its
organization. BMW actively supports young female executives and gives females
insight into the field of technology. BMW also offers extensive training for all level of
staffs; BMWs Trainee Promotion Programme (TPP) provides the perfect combination
of theoretical studies and practical work. BMW trainees receive many benefits in
addition to their pay, other social payments such as holiday and Christmas bonuses,
meal and travelling expenses subsidies, health programme and PC training.
BMW claims that it does not see its staff as a cost factor but as an essential performance
factor. Also the employees are referred to as associates' rather that works. BMW in its

human resources policy states that any policy that is not oriented towards its associates
will lead to negative cost effects in the long-run.
As a future-oriented company, we seek to pursue an exemplary, creative and associateoriented human resources policy, making significant contributions to business success
through our human resources activities. The human resources policy of BMW is an
integral feature of our overall corporate policy in both strategic and operative decisions.
(Corporate appraisal (or SWOT analysis) consists of the internal appraisal of the
organizations strength and weaknesses and an external appraisal of the opportunities
and threats open to organizations in competition within industry.

Recruitment at BMW India


Process Step Input

Mandatory

Documents
Operational Approved

Step 1
Request
staff

Mandatory

Output

Tools
Completed forms,

of requirement organization
for based

on chart,

Job

Job

approved

business

Description

job card

plan

document,

sheet

description
of

the

required position

Manpower
Requisition

Step 2

Job

Form
Portfolio results of Source

Candidate

descriptio

employees

search.

Preference

sheet

given

data

of Collection

recruitment;

of

applications

newspaper
advertisements,

to

recruitment

internal

agency,

candidates

internet
advertisements

Step 3

List

of Job

Short listing applicants

Description

Document

Short
applicants

listed
for

of

with their

interview

applications

applicatio

finalization

Step 4

ns
Candidate

Pre

interview schedule
Selected

Interview

and

form-curriculum

candidates

and

interview

vitae,

agreed target start

Selection
Step 5

schedule
evaluation form
A copy of Employment

date
Completion

Enrollment

required

joining formalities

employment

contract,

interview

required

and
of

with

of

documents relevant documents

Step 6

Orientatio

from candidate
Orientation

Orientation

evaluation form

Schedule

Feedback
orientation

on

obtained, training
material provided,
signed

JD

Step 7

Completio Communication

collected
Updated

Update

organization chart

department

compensat

of charts

organization ion
chart

documents

Step 8

Job

Probation

Descriptio evaluation form

Evaluation

n
document,
target
agreement

Probation

Result
evaluation

of

A vision of things to come


BMW is aiming to fortify its number one position in the Indian luxury car market, with
2010 car sales of more than 3,000.
BMW India, therefore, also aims to expand its operations by the year 2010-2011. For this
purpose, the company is constantly engaged in recruitments. The present employee strength
of BMW Plant Chennai is 120. The company aims to recruit around 50 more people and
increase its strength to 160-200 by the year 2010-2011.
The sources of recruitment used by the company for this purpose are as follows:
External Sources mainly Campus recruitments, Recruitment agencies
Campus recruitments
The selection process for candidates undergoing campus recruitments is as follows:
a. Technical round / Aptitude Test
Competency tested: Communication Skills

b. Group Discussion
Competency tested: Communication skills

c. Personal Interview

Competency tested: Communication Skills

All candidates are required to appear for the aptitude test and group discussion. The short
listed candidates are required to appear for personal interviews.

Internal Sources mainly transfers and promotions


a. Horizontal Shifts (Transfers)
b. Vertical Shifts ( Promotions)
Brand Building and Sustenance
Since its inception, the BMW brand has stood for one thing: sheer driving pleasure.
Sporting and dynamic performance combine with peerless design and exclusive quality,
resulting in the unique appeal of BMW automobiles.
BMW has successfully leveraged its history and tradition of excellence along with
innovation to become the most famous and recognized carmaker in the world. Typical
consumer brand associations for BMW might be heritage, stylish, luxurious,
powerful, elegant, performance and fuel efficient to an extent.
Also, with our enhanced product portfolio we have engaged with our customers and
prospects in innovative dialogues to ensure that the brand affinity transforms into product

ownership. There have been initiatives such as the BMW Golf Cup International across 10
cities and the BMW Art Cars exhibition, held at the Jahangir Art Gallery in Mumbai.
Conceptualizing the BMW Studio at Janpath, Delhi as a venue where our customers can
indulge with the brand in an exclusive environment is another. There are also formal dining
and wine-tasting events at leading BMW dealerships across India.
To reiterate the focus of the brand, we have adopted communication of the rich heritage of
BMW Eras through association with leading fashion designers and events such as the India
Couture Week. For us, if actions submit to the values recognized as being 'on-brand', it will
cumulatively build the organizations desired long-term reputation. If not, we appreciate
that it risks fragmenting what our brand stands for, and we won't go with the idea, however
compelling it is. This doesn't mean the brand is rigid, nor does it deny BMW opportunities.
Rather, it serves as a framework for decision-making, enabling the business to feel
confident that all its operational decisions are building the brand towards its long-term
ambitions.
Corporate Social Responsibility
BMW has undertaken to provide the basic welfare amenities to 3 villages. The details of
the proposal for these 3 villages are as follows:

Management at BMW India


Frank-Peter Arndt,
President of BMW India Pvt. Ltd.
Peter was born in Villingen, Germany, in June 1966. He graduated with a diploma in
International Business Management from the Pforzheim University of Applied Sciences,
and joined BMW AG in 1995 under the International Trainee Programme in Sales &
Marketing. In 1996 he rose to the position of Manager for the Africa Caribbean Region
responsible for product and price. In 1998 he was promoted as Junior Area Manager for the
Region, and held the post of Area Manager during 1999-2002 In 2002 he was elevated as
GM Market Development, Asia, Pacific, Africa and Eastern Europe Region a post he held
till 2005 end when he was appointed as President of BMW India Pvt. Ltd.
Andreas Schaaf,
Managing Director, BMW India Pvt. Ltd.
Andreas Schaaf was born in Berlin, in March 1964. After graduating as Diploma-Ingenieur
specialised in the study of Production Technology at Technische Universitat Berlin,
From1991 -95 he worked AEG AG Berlin as a Production Engineer, and came to BMW AG
in 1995 working in the FIZ Munich Plant of BM AG in the Process Planning and

Technology Assembly Department. He was promoted to Manager Production, at the door


assembly plant Munich in 1998 till 2001 when he was elevated as head of Assembly
Process & Structure Planning, Rosslyn Plant, BMW South Africa a position he held till end
2003. In 2004 He returned to his old plant FIZ Munich as Head of Projects Assembly
Products Line-2. From 2005-2006 he was Head of Projects VPS Value Added Production
System at technology Assembly, FIZ Munich before being appointed as Managing Director,
BMW Plant Chennai.

Organization chart of BMW India

ga
e
r
Ig
T
ai
n
d
Key inferences from the Organization Chart
Ln
o
g
i
s
1. Horizontal Differentiation
tg
i It refers
c to Departmentalization
s
BMW adopts functional departmentalization.
D
2. Vertical Differentiation
It refers to hierarchical levels in an organization
i
r 2.1
2.2 Hierarchy in BMW is that Managing Director- General Managerse
Deputy Manager-Specialists- Team Leader-Associate
3. Span of Control
c
3.1 It refers to the number of subordinates a manager can efficiently and
t
effectively supervise
3.2 Ideally, the number is 5-6 subordinates
3.3. In BMW, the span of control ranges from 3-7 subordinates
o
4. Centralization
r
it refers to the extent to which the decision making authority is
concentrated at the top management
In BMW, the final decision lies in the hands of Managing
Director
5. Formalization
It refers to the extent to which the rules, procedures, communication, and
instructions are written down and followed by organizational members.
In BMW, formalization is high
Factors causing high formalization are Nature of task is routine, nature of
product is Mass, Predictability of outcome is high, Cause and Effect

relationship is high, Presence of functional departments, low variety, high


volume
6. Specialization
6.1 It refers to the work specialization which is the result of division of
labor
6.2 In BMW, there is high specialization
6.3 Reasons for the same are that every functional head is an expert in his
or her area.
Basic principles followed by BMW

Responsibility
Customer orientation
Peak performance
Effectiveness
Adaptability
Dissent
Respect, trust, fairness
Leading by example
Sustainability
Society
Independence
Associates

Research Methodology
The purpose of methodology is to describe the process involved in research work. This
includes the overall research design, data collection method, the field survey and the
analysis of data.

Objectives Of the Study


Objective of the Study:
To know the consumer satisfaction.
Check Comparitive Performance level.
To find the satisfaction amongst the customers with the Brand

Sources Of Data Collection


Primary:
For my survey primary data have been used as a questionnaire to collect the data.

Questionnaire
A questionnaire is a research instrument consisting of a series of questions and other
prompts for the purpose of gathering information from respondents. Although they are

often designed for statistical analysis of the responses, this is not always the case. The
questionnaire was invented by Sir Francis Galton.
Questionnaires have advantages over some other types of surveys in that they are cheap, do
not require as much effort from the questioner as verbal or telephone surveys, and often
have standardized answers that make it simple to compile data. However, such standardized
answers may frustrate users. Questionnaires are also sharply limited by the fact that
respondents must be able to read the questions and respond to them. Thus, for some
demographic groups conducting a survey by questionnaire may not be practical.

SECONDARY:
The secondary data has been collected from the following modes:
Magazines
Books
Newspaper
Data through internet sources

Research Design
Research Design is the arrangement for conditioned for data collection & analysis of data
in a manner that aims to combined relevance to research purpose with economy in
procedure.
A research design is a master plan or model for the conduct of formal investigation. It is
blue print that is followed in completing study.
The research conducted by me is a descriptive research. This is descriptive in nature
because study is focused on fact investigation in a well structured from and is based on
primary data.
RESEARCH PLAN
Type of study: For completing my study I have gone for sample study because looking at
the size of population & the time limitation it was not convenient for me to cover entire
population. Hence, I have gone for sample study rather than census study.

Sampling Plan

A sample design is a definite plan for obtaining a sample from a given population. It refers
to the technique or the procedure that researcher would adopt in selecting items to be
inched in the sample i.e. the size of sample. Sampling plan is determined before data are
Collected

Sampling Unit
Sampling units are High Class and Educated people , Business Men etc.
Samples are collected via personal interaction or via electronic media.

D ATA
AN ALYS I S

Name: 50 Clients of Luxury Cars

Address:

South Delhi --- Saket , Malviya Nagar , South Campus Area

Pin Code____________

Gender:

Male: 35 ( 70%)

Female: 15 ( 30% )

Age:

1) Below18 : 0

2) 18-25 : 5

3) 26-35 : 20

4) 36-50 : 20

5) 51 and above : 5
Age Group

Occupation:

1) Service

2) Business

3) Student

4) Housewife

Occupation

Q.1) In your Opinion Which car is the Best ?

a) BMW ( 68%)
b) Mercedes Benz ( 32% )

Q.2) How long have you been associated with BMW or MERCEDES BENZ ? (In years)

a) Less than 1 year

b) 1- 5

20

c) 5-10

15

d) More than 10

Q.3) How would you rate BMW Motors on the following parameter?

Strongly disagree

Disagree

Neither agree Nor disagree

Agree

Know ledge of Sales Pers on

Strongly Agree

Knowledgeable sales person


Agree : 30 %

Strongly Agree : 50%


Disagree : 10%
Neutral : 20%

ii) Employees spent enough time


with you:

before sales : 10%


During sales : 80%
After sales : 10%

Q.4) Which Car Have the best Aftersales Service ?

a) BMW
b) Mercedes Benz

AfterSales Service

Q.5) What is your overall opinion about BMW over Mercedes Benz?

Very Bad 0
Bad 5
Neither Bad Nor Good 20
Good 15
Very Good 10
Brand Comparison

Q.6) How likely would you recommend BMW over MERCEDES BENZ ?
Very

Very

Unlikely

Likely

1:0

2 : 10
3 : 25
4 : 15

5:0

Q.7) Which Car provide the Best Value for Money

a) BMW : 25
b) Mercedes Benz : 25

Q.8) Which Car provides you wide range of Accessories and Add-ons ?

a) BMW : 20
b) Mercedes benz : 30

Accessories

Q.9) Which of the following Features of BMW you pefer more over Mercedes Benz ?

a)
b)
c)
d)
e)
f)
g)

Sun Roof : 5
Auto Visulaizer : 1
Auto Sensors Wipes nd Park : 5
Control panel : 4
Drive Controls : 10
Cruise Controls : 15
Convertible Roof : 10

Accessories

Q.10) Which Company provides More Powerful and Well Tuned Engines ?

a) BMW : 15
b) Mercedes benz : 10
c) Both : 25

Engine Preferrence

Q.11) Which Engine make you prefer the Most when you Buy a luxury car ?

a)
b)
c)
d)
e)

V6 : 9
V8 : 10
V12 : 15
VTVT : 10
CRDi : 6

Engine

Marketing Mix
E. Jerome McCarthy in the 1960s developed the mnemonic 4Ps which has become the most enduring of
the marketing mix frameworks (McCarthy 1965). McCarthy defined the 4Ps as product, price, promotion
and placement.
Applying the 4Ps at BMW is as follows:
Product
Since its inception BMW has remained a product based organization, this is the reason why BMW has
such a wide range of products. The company has three brands; the BMW, Rolls Royce and the Mini. If
talking about the BMW brand the following is the current portfolio of cars the company has to offer
BMW 3 series, 7 series, 1 series, 5 series, 6 series, X1, X3, X5, X6 and Z4, out of these models the best in
running is the BMW 3 series; the car has collected the greatest chunk of revenue for BMW over the years.
But the thing to consider while keeping these models in mind is the product life cycle. It shows the sales of
the product through their useful life during different stages of their lifecycle. The stages include
Introduction, Growth, Maturity and Decline.
If considering the product life cycle against the portfolio of cars that BMW has to offer then it can be said
that most of the BMW cars are on the maturity stage, even though the BMW X3 has high market share but
the market which it belongs to does not show signs of growing as previously mentioned in the analysis of
the BCG matrix. BMW has realized this and has launched the new version the BMW X3 in 2011 (BMW
BLOG).
BMW has to consider and place its products accordingly into the market, if most of the products of the
company are going to be in the maturity stage then there will be serious problems for the company as all of
them will be going into decline together. Thus constant and increased improvement into research and
development has to be made in order for BMW cars enter into the growth stage of the product life cycle.
In 2007 BMW launched a clip on the internet about its GINA Light visionary model, it is a fabric skinned
shape shifting sports car concept built by BMW. The car is enclosed with flexible, stretchable water
resistant translucent man-made fabric skin polyurethane-coated Spandex, is resilient and durable. It
resists high or low temperatures, does not swell or shrink and the movement does not slacken or damage
the fabric. ( DesignBoom.com) . Though the car is not for sale and thus hasnt been introduced into the
markets and is kept at the Munich museum it has caught the attention of the world when it was premiered
in 2007.
BMW should launch this car in the markets now using outdoor campaign and digital marketing as such
mediums should be used for high value impact products. The BMW Gina can give competition to the

Mercedes invisible car as both of them are new and innovative technologies and consumers are willing to
pay higher prices for such innovations.

Price
Price is the most important and decisive factor for a consumer in making a decision for buying a product,
Pricing can have BMW although has high price range for its cars but it is certainly value for money. The
price range for BMW cars is 19000 to 80000. Most of the BMW pricing strategy is based on competitor
prices. For e.g. the BMW 3 series and the Audi A4 which represent the same market are loosely priced the
same.

Promotion
Sometimes promotion is confused with marketing; however promotion is the part of the overall marketing
mix of a company. So in effect marketing means to create interest for potential customers in the companys
products and services. On the other hand Promotion happens when a company offers a discount, runs an
advertising campaign and links this communication to their value proposition. (Stephen Blacker).
In the GURGAON, BMW markets its product using TV, radio, press and online marketing (BMW
Education). BMW also uses outdoor campaigns for branding and new car launches. The BMW 5 series
was heavily advertised using outdoor campaigns, the company ran a three-week digital and poster outdoor
campaign in Londons Holland Park Roundabout and selected premium shopping centers to promote its
new BMW 5 series range. (Marketing Week).

Recently because of the boost in the number of internet users around the world, viral marketing has
become a popular medium of advertisement. It can be delivered by word of mouth or enhanced by the
network effects of the internet. Mercedes one of the rivals of BMW uses this medium very effectively, the
Mercedes Invisible car campaign went viral over the internet when its clip was launched on popular social
media websites including YouTube. In one month of its online campaign it has achieved over 9 million hits
on YouTube. BMW should also use such techniques as it proves a very effective method in promoting its
wide portfolio of cars. (Digital Strategy Consulting)
Place
Place includes all of the business activities involved in making the product available to target customers.
BMW sells its cars through a number of showrooms in the GURGAON and as well as from an extensive
network of dealers who are provided with far-reaching expertise and knowledge from BMW.(BMW
Education). Place plays an important part in the marketing mix as it refers to the ease for the customer in
purchasing its products. BMW realises this but needs to improve onto this aspect by providing excellent
customers services and after sales services to their customers.

Implementation
For the above ideas to be implemented by BMW, effective communication shall be required from the
company within the organization and especially outside the organization to the consumers. If BMW wants
to launch the GINA Light Visionary Model in order to compete with the Mercedes Invisible car; the
company will have to make organizational and structural changes as the company is going away from its
core strategy of product development and going towards market development by recognizing new markets.
As discussed earlier about embedding viral marketing within the BMW marketing strategies, the company
will have to use the services of viral marketing experts as they advise well on how to make internet clips
famous within social media websites

Budgeting
Marketing budget is one of the integral parts of a successful marketing plan.

Monitoring and Evaluation


One of the best tools to monitor and evaluate a marketing plan is the balanced scorecard approach. It is a
strategic planning and management system that is used extensively in business and industry to align
business activities to the vision and strategy of the organization, improve internal and external
communications, and monitor organization performance against strategic goals. (Kaplan and Norton).
There are four perspectives discussed in the approach which are detailed in the diagram below. (Balanced
Scorecard.org)

At BMW all of these perspectives have to be taken in consideration for a successful marketing plan.
Learning and Growth: This perspective includes employee training and corporate cultural attitudes related
to both individual and corporate self-improvement, at BMW advanced knowledge management systems
will have to be put in place for employees and high level managers to exchange knowledge. As a
completer team shall be needed to launch new products and enter new markets.
Internal Businesses Processes: In order for the marketing plan to succeed, it is necessary for the
shareholders of the business to agree upon the plan as it is their money which is used as capital in the
business. It is necessary for BMW managers to know well the processes of the company are running and
whether they are in line with customers demands. For e.g. the GINA light visionary model car should be
in line with customers demand and requirements.
Customer: This is the most important perspective for an organization, as customer satisfaction should be
the top priority for a company. BMW already excel in this as most of BMW customers are loyal to the
brand.
Financial: BMW Financial services were established in 1992, the department supports the marketing
efforts of BMW. It is very important for shareholders to have accurate and updated financial information.

The shareholders at BMW who are predominantly institutional investors, should have accurate information
of the funding required to implement the marketing plans (The Palladium Group)

Conclusion
BMW has a wide and diverse product portfolio; this is the principal strength of the company, the company
should build up on this strength and enter new markets as well. Currently BMW has recovered from the
recession which prevailed in the GURGAON as sales from the past two years have shown gradual
increase, but market stability in 2012 and further on is unsure because of the volatility in the GURGAON
and EU; as GDP growth shall go down by 0.3% in 2012 as predicted by John Micklethwait (The World in
2012). This should concern BMW as it is seen as premium and luxury car manufacturer, to counter this
decline in customers purchasing power, the company should cut their costs and pass on the lower costs to
consumer s in order to achieve the corporate objectives in 2012 .

QUESTIONNARE

Being an esteem customer of BMW Motors Ltd. you are requested to take out
a few minutes and fill the following QUESTIONNAIRE:
Name:
Address: ___________________________________________________________
___________________________________________________________
___________________________________________
Pin Code____________

Gender:

Male Female

Age:

Below18

18-25

26-35

36-50

51 and above

Occupation:

Service

Business

Student

Housewife
Q.1) In your Opinion Which car is the Best ?

c) BMW
d) Mercedes Benz
Q.2) How long have you been associated with BMW or MERCEDES BENZ ? (in years)
a) less than 1
b) 1-5
c) 5-10
d) more than 10
Q.3) How would you rate BMW Motors on the following parameter?

Strongly disagree
Disagree
Neither agree
Nor disagree agree
Strongly agree
Q.3) Are you aware of the following facilities provided by BMW Motors?
FACILITIES Yes No
i) Motors insurance

ii) Extended warranty


iii) True value
iv) finance
v) Owners Club
vi) Genuine accessories
Q.4) Which Car Have the best Aftersales Service ?
c) BMW
d) Mercedes Benz
Q.5) What is your overall opinion about BMW over Mercedes Benz?
Very Bad
Bad
Neither Bad Nor Good
Good
Very Good
Q.6) How likely would you recommend BMW over MERCEDES BENZ ?
Very

Very

Unlikely

Likely

Q.7) Which Car provide the Best Value for Money


c) BMW
d) Mercedes Benz
Q.8) Which Car provides you wide range of Accessories and Add-ons ?
c) BMW
d) Mercedes benz

Q.9) Which of the following Features of BMW you pefer more over Mercedes Benz ?
h)
i)
j)
k)
l)
m)
n)

Sun Roof
Auto Visulaizer
Auto Sensors
Control panel
Drive Controls
Cruise Controls
Convertible Roof

Q.10) Which Company provides More Powerful and Well Toned Engines ?
d) BMW
e) Mercedes benz
Q.11) Which Engine make you prefer the Most when you Buy a luxury car ?
f)
g)
h)
i)
j)

V6
V8
V12
VTVT
CRDi

Date:

Customer Sign.

You might also like