BMW comes back to Super Bowl

BMW is returning to the Super Bowl after 10 years, as it enters one of the busiest periods of new model and product launches in its history. Stacey Morris, marketing communications manager at BMW, says "we're in the window of our biggest launch period in history and the Super Bowl gives us the stage to make that big impact". BMW returning to the Super Bowl after 10 years is a sign that its committing to heavily reinvesting in advertising ahead of its mix of new car launches. BMW's Super Bowl spots are expected to feature its all-new 6-Series, 5-Series, X3 Crossover and its upcoming Active E electric vehicle.

Segmenting and Targeting Markets

BMW uses three steps for targeting which are market segmentation, target choice and product positioning. When using segmentation, BMW finds information by looking at geographic, demographic, behavioural, socioeconomic, beneficial characteristics of society which helps them to target the market more effectively. The demographics of people who are able to purchase a BMW are men and women aged 30-50 years old. Behaviourally, these people have a successful image in their mind before buying a car. Geographically, the main markets for BMW where they are doing more than 65% of sales are Europe and North America because these areas are both heavily industrialized locations which means that residents arefinancially positioned to by their cars.

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.

BMW Has A Major Recall!!!!

BMW has issued a voluntary recall of 2007 to 2010 model cars after an ABC News report stated that vehicle owners are experiencing sudden reductions in vehicle power. BMW issued a recall of 130,000 cars featuring its twin-turbo six-cylinder engine because of a faulty fuel pump that can fail when the cars are driving at high speeds. The company as well as National Highway Traffic Safety Administration received complaints about the cars going into a reduced-power mode, which allows drivers to safely pull off the road. Also, BMW is going to recall 20,800 six-cylinder X5 models to replace the fuel pump. Up to date, no injuries has been reported due to this problem.

Sales Promotion and Personal Selling

BMW is betting on a new, high-tech marketing system to build both sales and owner loyalty rates. The new program is designed to increase contact between the company and their customers. BMW has been offering heavily subsidized loans, often with interest rates of just 0.9% or 1.9% to make it easier to pay down equity in a hurry. BMW is also looking at how much to emphasize leasing. One reason is that leasing provides a steady and predictable supply of used cars that feed BMW’s popular certified pre-owned program.

BMW presents the 2012 BMW 6 Series Coupe

BMW displayed the new BMW 6 Series Coupe at the Paris Motor Show. It is the first vehicle from BMW to get full LED treatment; driving lights, indication lights, brake lights, and rear lights. The BMW 6 Series Coupe offers a state-of-the-art interior design. It has unique lines going across the dashboard, and twisting shapes that connect the center console to the driver and passenger’s own space. It has a high-quality leather trim with double stitching in a contrasting color. It has a panoramic glass roof which enhances the lightness of the design language.

BMW and GSD&M Idea City say their farewells!

The partnership between BMW and the GSD&M Idea City agency will end on December 31, after five years of collaboration. The reasons behind the separation are unclear. Some say that BMW was fired by the agency. Other say the death of BMW’s vice president of marketing, Jack Pitney, earlier this year, weighed heavily in the decision. The separation was initiated by the agency, not BMW. The Joy campaign, which was started by GSD&M Idea City, will still continue.

Rumor!!!!! Next BMW M3 sedan to be replaced by hatchback M3 GT

BMW, for the past 5 years or so, has been on a campaign to up the ante and make more horsepower, replacing the supercharged engines. Now, BMW seems to be returning to the traditional form, with V8s coming back where V10s had been used, and inline 6s coming back in lieu of the V8s that have gone into more modern M3s. with this redesign, will BMW begin to go in a new direction with the styling of the new M3s? with the X6, 5 Series GT, and the X4, BMW has shown that they like the hatchback design, and it might make sense for the car moving forward, to distinguish it from older M3 sedans.

Advertising and Public Relations

In 2010, BMW embarked on one of it’s biggest branding campaigns. A new theme, “The Joy of Driving,” was added to every television, digital and print ad, as well as events. The theme shifted the focus from the car to the car owner. The “Ultimate Driving Machine” slogan still appears in the ads but the shift was apparent in one of the print ads that read “At BMW we don’t make cars, we make Joy.” BMW’s 2010 Joy campaign kicked off in the Winter Olympics. Spots included 60 second commercials showing how BMW brings “Joy” in driving. BMW integrated the message in the Games  by sponsoring NBC’s “Olympic Moments of Joy” segments.

Retailing

Recently I visited Target which is located on Flatbush Avenue in Brooklyn. I was surprised to see how the store was kept. Despite the attempt to keep the place organized, the shoppers would mess things up. The second floor was more disorganized than the second floor, probably because thats where the clothing, the accessories, and the cosmetics are. They also have a Starbucks and a Pizza Hut on this floor. The top floor is where the home entertainment, da electronics, and the toys are. There is where you find most of the young adults and children. As i strolled down the isles, i noticed how limited and empty the shelves were. This is not good for business because the customers should be able to get what they want and need. Despite the store being disorganized and limited, the prices are set at fair standards.

Consumer Decision Making

The primary driver of BMW's success in the US has been their leasing program that makes new BMW's available to lease. The vast majority of new BMW's sold in the US are leased, so cost is a factor. BMW's offer a balance of comfort and handling that sets the standard for sports sedans, and the fact that they are the largest privately owned car company lets them take chances with styling and technology that other firms wouldn't take. BMW's are extremely well engineered, solidly made and responsive at the wheel. BMW offers many brands and styles so they can be purchased by anyone. BMW try to lore constomers in with their reputation of making the fastest cars around. They are also known to be very confortable, which is a very important aspect of buying a car. Together with the speed, comfortability, style, and compatibility, BMW is a confident manufacturing company and assures that people will enjoy their products.

Developing a Global Vision

BMW Financial Services has been successfully operating in India with its three business lines: Retail finance, Commercial finance for the BMW India Dealerships and Insurance solutions through cooperation partners for BMW customers.The services offered through BMW Financial Services have been valuable to the premium clients who require financial solutions. Frank-Peter Arndt, member of the Board of Management of BMW AG, who is also responsible for Production stated, “India is a market that holds great potential for the future for us and is a building block in our global market offensive.”

BMW is considering expanding the range of products offered in China, as well as introducing a leasing-vehicle business, in order to enhance its presence on the Chinese market. BMW plans to increase its network of Chinese suppliers to more than 160 from about 100 now. Starting June 2012, BMW will start to assemble locally the new BMW 3 Series sedan.

Corporate Irresponsibility

The “free market” in coffee forces small farmers in the twenty four countries that supply Starbucks to compete in a self destructive “race to the bottom.” The law of supply and demand applies in the coffee market: as coffee supplies rise, the price of coffee drops. Starbucks takes advantage of this “free market” to divide and conquer the millions of coffee farmers. It shops among producers, paying what it calls “premium prices” for “high quality coffee,” picking and choosing supplies in relatively short-term contracts. The prices Starbucks pays are market prices that include standard increments over commodity market prices, for the quality and source of the coffee. Starbucks offers prices based on the current market. Starbucks has taken unfair advantage of producers ever since the end of the coffee quotas in 1989, by paying the low prices set in this free market for its coffee. The premium prices it pays are prices in the commodity markets, marked up for quality. Several years ago, Starbucks’ “premium prices” were at or less than the farmers’ cost of production, while coffee farmers were starving all over the world. Then and now, the company’s “premium prices” are unfairly low for farmers, who cannot provide for their families on their coffee income.

The Marketing Environment

BMW has been trying to outsell Mercedes-Benz in the last years and most of their efforts eventually paid off.

In the last 10 years, BMW has managed to sell twice as many cars as they used to, being the best premium car seller on the market. Everyone agrees that they’ve made a huge progress, but the recession couldn’t be anticipated by anyone.

BMW had a great marketing strategy, but it can fail in times like these. Many BMW owners bought their cars trough leasing and now they can’t afford making payments. This is a huge problem from BMW and many other car producers all over the world. Even so, the company is still producing new models and they have a few methods of getting pass the recession.

The evident market recovery since the beginning of the year continued to gain pace during the second quarter of 2010. BMW performed exceedingly well on the international markets with a range of new and attractive models. BMW net income in the second quarter increased almost  to about $1.1 billion. For the first half, BMW earnings were about $1.5 billion, versus a loss of about $41 million in the recession.

Country of Origin

Shirt - China

Sweater - China

Pants - China

Underwear - Thailand

Socks - No Label

Sneakers - Vietnam

Ethics and Social Responsibility

Scientists are working with governments and businesses to find ways of reducing the demand for energy and increasing the use of renewable sources of 'clean energy', which does not contain carbon dioxide. BMW has developed CleanEnergy in order to meet the long-term objective of reducing emissions from its cars. BMW was the first car maker in the world to focus on the development of its cars with the use of hydrogen as a source of energy. Hydrogen's potential to replace fossil fuels as a means of powering cars has long been recognized, but it was only with the arrival of the BMW Hydrogen 7 in 2006 that this potential became a viable reality. BMW Group is continually promoting the introduction of hydrogen as a source of energy, establishing partnerships with other companies and encouraging decision-makers and the energy industry to implement changes.

Strategic Planning

BMW's strategic plan includes global sales increases, substantial spending cuts, aggressive financial targets, U.S. production increases, more alliances, and the possible establishment of a fourth brand. The automakers are determined to:

A) increase worldwide sales to 1.8 million cars and SUVs by 2012 and more than 2 million by 2020

B) cut spending by $8.5 billion (U.S.) by 2012

C)improve profitability to compete better with Mercedes-Benz

D)increase U.S. production by 71 percent to 240,000 vehicles by 2012

E)buy more U.S. parts

F)increase Mini production to 260,000 vehicles per year

G)increase China's sales to 44,000 vehicles a year from 30,000

H)maintain its status as an independent company while looking for more strategic alliances where there are “synergies and efficiencies”

I) possibly establish a fourth brand.

Brief History and Mission Statement

BMW stands for Bavarian Motor Works. It is a German automobile manufacturing company founded by Franz Josef Popp in 1916. The BMW logo is portrayed as an aircraft propeller to signify the white blades cutting through a blue sky. After WWI, BMW was forced to stop making engines because of the Versailles Armistice Treaty. After that BMW began making motorcycles in 1923 and then automobiles in 1928. The first motorcyle, the R32 twin was launched in 1923 and the first car, the Austin Seven later on in 1928. The BMW headquarters is in Munich, Germany.

The BMW Group is the world's leading provider of premium products and services for indivisual mobility. The BMW Group wants to become the most successful manufacturer in the car industry. Their vision is uniqueness through diversity, ladership, and taking risks.