Professional Documents
Culture Documents
PROJECT ON
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
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
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
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
SWOT Analysis
13)
14)
15)
16)
17)
18)
19)
20)
21)
22)
23)
24)
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.
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)
"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.
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.
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.
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.
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.
Threats from
Potential entrants
Suppliers
Competitive
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
Step 1234
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
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
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.
Step
Step
Step
Step
Step
Step
2Step
3Step
4Step
5Step
10
6Step
78 11
9
Supplier Name
Commodity required
Cost center
Value as per quote
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
Maximum Points
Quality
35
Cost
25
Logistics
20
Management
20
Total
100
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.
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
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,
Selection
Step 5
schedule
evaluation form
A copy of Employment
date
Completion
Enrollment
required
joining formalities
employment
contract,
interview
required
and
of
with
of
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
Evaluation
n
document,
target
agreement
Probation
Result
evaluation
of
b. Group Discussion
Competency tested: Communication skills
c. Personal Interview
All candidates are required to appear for the aptitude test and group discussion. The short
listed candidates are required to appear for personal interviews.
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:
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
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.
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
Address:
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
a) BMW ( 68%)
b) Mercedes Benz ( 32% )
Q.2) How long have you been associated with BMW or MERCEDES BENZ ? (In years)
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
Agree
Strongly Agree
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
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.
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
Very
Unlikely
Likely
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.