bmw Positioning Statement and Motto

BMW COMPANY

Introduction

BMW a simplification of Bavarian Motor Works and was born from an idea of Gustav Otto and Karl Rapp . Around the year nineteen sixteen Gustav Otto’s Flugmaschinenefabrik Company merges into Bayerische Flugzeug-Werke AG (BFW) the following year 1917, the Motorenwerke Company merged with Bayerische Motoren Werke. Following in this trend in five years later BMW AG transferred the company name, manufacture of its engines and all its affliliated brands to Bayerische Flugzeug-Werke AG. On the sixth of March, 1916, Bayerische Motoren Werke AG (BMW) was born and continues to be known as so to date.

BMW is synonymous with high-end, luxury cars. This led to a case where BMW only targeted the elite and wealthy businessmen. BMW dropped this model and now targets more segments of the market to increase profits as it continues to gain an even bigger share of the automobile industry.

Market segmentation within the industry

A market segment within any given industry should be identifiable, substantial, accessible, and stable. Segmentation of any given population enables one to have a better defined estimate of the numbers in terms of people that each category will have which then provides an idea of your potential market size. Segmentation has given BMW a clearer view of all its potential customers. It’s crucial as it has enabled it to focus whatever resources that are available to customers whose needs it has the capability of satisfying. In the auto industry BMW has been able to capture the luxury car segment and make a name for itself and has been able to prove time and again that it clearly belongs. To break this down further, BMW was able to create the X3 Series, which has been able to appeal to successful females. The BMW X5 Series was designed with an aim of capturing the imagination of families that are affluent and successful, and the X7 Series had to appeal to the established, successful businessman one who valued its design and comfort.

Demographic characteristics

Demographic segmentation is the separation of the market based on the following criteria age, level of education, race, generation, country of residence, gender and religion. Each of these key variables is can further be broken down into smaller subcategories. Gender has customarily been used to accurately segment the BMW market and it has enabled the company have a better insight into how gender affects the uptake of a particular product line. The average age of a BMW owner will fall between the age of thirty and fifty, this individual can be of either gender; they may be married and at the same time have a family of up to three children. Demographic segmentation has proved very crucial with some product categories and has enabled BMW perform targeting with only this demographic information, for example, BMW turned out to be a success with men who are about thirty five years of age and earning about seventy five thousand dollars annually. Women have a preference for the more compact BMW X3, with couples especially those raising families or expecting to start on soon going for the bigger X5, the BMW X6 has continued to be considered one of the best performing sports cars in its class.

Psychographic segmentation

Psychographics captures the emotion and reasoning behind people’s decisions under psychographic approaches; we consider the following factors and their effects on customers towards BMW i.e. values, attitudes, lifestyle, loyalty and benefit sought. Each market segment will responds differently to a change in product pricing, promotion, and design. In most markets, particular segments have been found to show complete loyalty to their preferred brand of goods, while in others they are able and willing to switch to the competition with a response indicating a shift towards brands offering lower prices and minimal benefits. People of various socio-economic status and similar age may lead rather different lifestyles, and the firm has been adapting their automobiles quickly to meet the needs of these diverse lifestyles. They have identified the following areas as critical psychographic areas that will influence BMW purchase trends

Be longer – this a consumer who probably lives in a town, is family and friend oriented, may be very conservative and likely religious

Achiever – in most cases this is a serious business person looking to become more and make more; wealth and power and are the forces that drive this person they have a need to be different pushing themselves apart from the pack

Emulator – this person wants to be an achiever but is not and they are willing to do anything to make him or her look like an achiever trying to attract the opposite sex or gain approval from peers

Socially Conscious Type A – this person who believes and truly wants to make the world a better place; this person drive fuel efficient cars, buys green, and recycles they are highly educated and sincerely want to help the socially disadvantaged; they have a concerned on how what they drive affects the environment and society.

Socially Conscious Type B – they are quite similar to type A except he or she is entirely cynical; this person lives and communes with socially conscious groups and thus highly influenced by their actions and perceptions

Balanced/Totally integrated – this potential customer is a combination of socially conscious and achiever; he/she achieves goals by having the feeling of making the world a better place

Needs driven – this is a customer who buys on impulse; there needs to be no prior planning, things are purchased as needed or when first seen and a desire arises; the consumer believes in spending now.

The BMW Corporation has been able to achieve a significant milestone by designing an automobile to cater for each group with the socially conscious typeA and B being their latest achievement through their range of electric and hybrid cars. This group has been previously elusive due to their self-sufficiency and a tendency to live amongst others like themselves.

Geographic segmentation

Geography defines the fundamental aspects of climate, customer density and culture. BMW Corporation dealerships are in most cases located in upper middle class to wealthy neighborhoods, with a strong brand that says; I belong. All over the world BMW have continuously been adapting their cars to meet the requirements of the diverse regional segments. It has also applied geographic segmentation selectively which has enabled it target new regions and local territories. By establishing regions that are rapidly developing and at the same time have a high probability of putting to use BMWs versatility and adaptability. This has led to geographical segmentation being a crucial tool for its advancement.

Behavioral segmentation

This divides the market based on customer use, knowledge, product response and the overall client attitude. In behavioral approaches, social class is the most measurable indicator commonly and it continues to be used in the segmentation of the market with income and career choice also coming in close. The variables of buyer behaviors may also include

The benefit sought –this may include quality, economy, service, looks, etc.

Usage rate –is the user a heavy user or limited user

Loyalty to brand – it may be divided into either complete loyalty, split loyalty or shifting loyalty

Occasion – holidays and occasion stimulate purchases

Target market

A Good Target market should fulfill the following characteristics

It should be Measurable; Accessible i.e. the target market must be within reach when marketing. Profitable meaning that this group has the willingness to buy, sufficient size, and is able to pay for the product. Last but not least it should be distinguishable from other sections of the market in matters pertaining to product awareness, the coherence of response to potential advertising messages and percentage of potential customers.

BMW’s target market has for a long time been the wealthy, successful business person. However this has been changing with time, BMW had to change, and it is no longer a brand for only the wealthy successful business person. It now targets women, men, married couples with children, bachelors and bachelorettes and BMW does this without lowering their standards of quality, safety, innovation, technology, and design.

Selection process for target market

Targeting will enable BMW become more cost effective in marketing and advertising. We have conclusively been able to ascertain that targeting enables the firms define who potential clients are. This will help group this potential clients based on

Purchasing power

With purchasing power then what is the likelihood of buying a BMW.

BMW has long believed in the creation of trends not emulating them. Through extensive research, BMW is able to find market gaps and following up by creating products to fill these gaps. It has through marketing identified psychographic segmentation systems, e.g. double income, no kids or simply DINKS, who have time and time again been good targets for BMW cars. The BMW X Series which was a creation that was envisioned to cater to desires of the auto industry, this was a market that was looking for good SUVs that could cater to their diverse needs. The successful business person was the initial target market, but when BMW realized that this created limitations, BMW decided to try a different approach. BMW finding out what their customers desire and create an automobile to meet that need.

Positioning statement

Positioning will define how BMW products relate with its clients while still setting apart its cars from any potential competition. This will mean coming up with a strategy with the ability to change and/or grow how a particular segment of the market will perceive its line of automobiles when compared to other competing brands. Positioning has the ability to increases potential marketing effectiveness. A major goal set by BMW is to become the ultimate definition of engineering precision and design ingenuity in the auto industry. Their products have continuously been defined as the “Ultimate Driving Machine”. The positioning statement that best fits their mission needs to portray these attributes and attract customers. This positioning statement would be

“The essence of a DRIVE.”

D – Design

R – Response

I – Innovation

V – Versatility

E – Elegance

BMW offers its clients a free maintenance program which running over a period of four years, this comes as part of the standard kit on all the 5 Series range of cars with an option of purchase for any of the BMW Series. The proud owner of a BMW needs only gas up as all others are catered for.

Market segmentation is crucial to success in any business. The company must know what segments to target, what each segment wants, and have the capabilities to produce and provide the target market with what it wants. BMW knows exactly what their customers want and have been providing it since 1916. Innovation is what has placed BMW among the greats when it comes to luxury in the auto industry. With this continued innovation and creativity, BMW is assured to remain at the top of this segment.

References:

Dudovskiy, J. (2014). Research Methodology. Retrieved from http://research-methodology.net/bmw-segmentation-targeting-and-positioning/

BMW Group. (2014). Retrieved from http://www.bmwgroup.com/bmwgroup_prod/e/0_0_www_bmwgroup_com/unternehmen/historie/meilensteine/meilensteine.html

Linked In/Slide Share. (2014). Customer-Driven Market Strategy: Creating Value for Target Customers [PowerPoint slides]. Retrieved from http://Linked In. (2014). Retrieved from http://www.slideshare.net/Irothko/201107-marketing.

Linked In/Slide Share. (2014). Market Segmentation [PowerPoint slides]. Retrieved from http://www.slideshare.net/akanksha91/market-segmentation.

The North Crossing. (2000-2004). Retrieved from http://www.northcrossing.com/PsychographicMarketing.html