Developing and Managing Products

On January 6, 2010, BMW ran a personalized mobile video advertising campaign to promote it's X1 car model to a younger demographic in China. BMW is grrowing quickly in China as its sales are up to this year more than 40% to 90,000 units. BMW recognized that the mobile device is the primary Internet access tool in China and is the most relevant medium for a younger demographic. Alexander de Boissezon, business development manager at Clip in Touch, Netanya, Israel, said that BMW wanted to have a unique camaign targeting a younger demographic with a high impact and personal message. The personalized videos were designed to create an impact so that the viewers would show their friends and create a buzz that BMW was sending a pesonalized greeting. Initial response of the campaign was positive, generating more test drives in a three day period than at any time of the year. BMW believes that it empowers people to express their individuality and wanted its X1 marketing message to do the same.

Customer Relationship Management

Siebel Systems Inc., a provider of business applications software announced that BMW North America Sales and BMW Financial Services developed contact centers  to enhance the customer experience and to increase customer loyalty and retention. Both divisions have developed seperate homegrown call center systems, beginining with a contact management solution and then adding email, workflow and other capabilities. BMW of North America is trying to keep it simple as it uses customer relationship management systems to supercharge dealership parts and service sales. Grant Paullo, BMW's importer manager aftersales marketing and communication, says there are three objectives for leveraging data to increase revenue and build brand loyalty:
1) Transition dealership customers from the showroom to the service department.
2) Strengthen  customer relations.
3) Reconnect with ex-customers.
Reconnecting with their ex-customers is where they have the biggest success.

Integrated Marketing Communications

All products has four stages of life: introduction, growth, maturity, and decline. However, this does not apply to BMW's products. Jim McDowell, the vice president of marketing for BMW says, "If a product is declining, we would prefer to withdraw it from the market, as opposed to having a strategy for dealing with the decling product". This means that the maturity and decline stages are not included in BMW's product life cycle. Before a product reaching the maturity stage that is characterized by decreasing sales rate and declining profit, BMW pulls it out of the market. BMW's cars usually have a product life cycle for about seven years.

Product Concepts

BMW's Rosslyn, South Africa, plant was the first BMW assembly line established outside Germany, in 1973. The wholly-owned subsidiary now exports over 70% of its output. In the mid-1990s, BMW invested R1bn to upgrade the Rosslyn factory. The plant now exports over 50,000 3 Series cars a year, mostly to the USA, Japan, Austria, Africa and the Middle East. The production of the BMW X3 moved to Spartanburg from Europe after the completion of a major expansion of the U.S. facility. Recently, the plant has undergone a major renovation switching from 2 production lines down to one. Both the X5 and the X6 are produced in the same line, one right after the other. Outside Germany, the largest output of the BMW Group comes from British factories. BMW signed an agreement in 1999 with Avtotor to produce cars in Kaliningrad, Russia. Factory has been assembling 3 and 5 -series cars. BMW has established a joint venture with Chinese manufacturer Brilliance to build BMW 3 Series and 5 Series that have been modified for the needs of local markets. The BMW X3 was manufactured in Graz, Austria between 2004 and 2007 by Magna Steyr with mainly German components. The X3 production will be moved to the Spartanburg plant due in part to high production and transportation costs of what was meant to be the "more affordable" SUV. North American pricing, after said costs, were nearly on par with the larger, American-built X5. In 2005, BMW Group built a new manufacturing facility in Egypt. This plant builds 3 Series, 5 Series, 7 Series, and X3 vehicles for the African and Middle East markets. BMW opened its first assembly plant in Chennai, India in March 2007 to assemble 3-series and 5-series vehicles. The new factory may also be used to help boost the production of BMW’s super-successful MINI. BMW India headquarters is located in Gurgaon outside Dehli.

BMW Raises Profits

BMW raised its profit forecast for 2010 Wednesday after reporting a strong profit for the third quarter thanks to soaring sales in China and a rebound in the United States. BMW said that net profit in the third quarter was an estimated 874 million, or $1.2 billion, compared to the estimated 78 million a year earlier, when the global automobile industry was in crisis. Revenue in the quarter went up to 36 percent, to an estimate of 15.9 billion, as sales in the United States went up to 9 percent to 70,657 vehicles. In China, BMW unit sales went up to 91 percent. BMW executives warned that the outlook for the global economy and capital markets is still uncertain, but said that the recovery in auto sales appears to be sustainable. The company said it would earn a 7 percent return on operating profit from car sales for the full year, compared to a previous forecast of 5 percent. BMW shares fell in early trading but by mid-afternoon were little changed from the day before.