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EXECUTIVE

SUMMARY
Executive Summary
The motive of this essay is to give clear information about BMW ag’s entry

into the luxury and premium automobile sector. The flow of the essay would

start with the background and introduction about the company, then coming

over to the mark et factors that led company to enter INDIA, also about the
entry strategy in ter ms of corporate decisions they took for doing business

in INDIA and what compani es’ present strategy in INDIA is to gain the

market share.
Bayerische Motoren Werke G. m. b. H. Started operations in 1918, the

foundation stone was laid as late as 1916 as Bayerische Flugzeugwerke AG

(BFW), it then cha nged into Bayerische Motoren Werke Aktiengesellschaft

(BMW AG) in 1918.


In today’s date. The list of ten largest automobile manufacturers features

BMW g roup and even possess the brands like MINI and Rolls-Royce, the

trio being the c ore heart of super luxury brands in the worlds industry.
The BMW GROUP’S financial services also have a boosted stand in market

and also the motorcycle sector is doing business successfully.

BMW INDIA Company setting up headquarter in gurgaon (the ncr) BMW


INDIA is 100% subsidiary of the BMW group. The investment initially in

INDIA is around 1.4 billion INDIA n rupees.

BMW INDIA is a German producer of cars and motorcycles marketed under

flagship of BMW brand In 2006 BMW focussed on one of the biggest and
fastest growing market of luxury and niche car sector which is INDIA and

also looking at the fate of the competit or Daimler Benz, grounded their

tents in INDIA. Also allowing space for more inv estments in INDIA

following financial year for over 30 million again in addition the initial
investment done. This is all for the premium automobile sector mark et in

INDIA which consist of about 1.3% which is in percent a small figure but w

hen it comes to numbers it is around 10 million perspective customers in

INDIA a nd with the current market and economy this figure will certainly
go up at the r apid speed Now coming up to the factors which led BMW AG

to invest as fdi into INDIA.


TABLE OF CONTENTS

 Company Profile

 BMW

• Company Potrait
• Company Management

• Business Intrest

• Corporate Facts

 Mercedes-Benz

• Introduction
• Social Involvement

• Research & Development

• SWOT Analysis

 Hypothesis

 Reseaarch Methodology
 Data Analysis

 Findings

 Bibliography

 Annexure

• Questionnare
COMPANY
PROFILE
BMW Motoren
Company Potrait

• Strategy
Identifying potential and encouraging growth. Knowing what we represent.

Recognising where our strengths lie and making the best use of every

opportunity. Following a clear strategy. Goals we have attained are in

essence the point of departure for new challenges. This is the philosophy
that inspires every individual at the BMW Group. It influences the

company's structure and it plays a vital role in the decision-making process.

Our corporate ethos finds its expression in the uncompromising pursuit of

the superlative. The result? Outstanding brands with an unmistakable


profile. Automobiles and motorcycles which fascinate people all over the

world and which win legions of new admirers every day. And a degree of

success which sees the BMW Group go from strength to strength.


With the three brands, BMW, MINI and Rolls-Royce Motor Cars, the BMW

Group has its sights set firmly on the premium sector of the international

automobile market. To achieve its aims, the company knows how to deploy

its strengths with an efficiency that is unmatched in the automotive industry.


The strategic objective is clearly defined: The BMW Group is the leading

provider of premium products and premium services for individual mobility.


• Company Management
The board of management.

The board of management consists of six members plus the chairman of the board.

Dr. - Ing. Norbert Reithofer Dr. Friedrich Eichiner

Chairman of the Board of Management Finance

Frank-Peter Arndt Dr. - Ing. Herbert Diess

Production Purchasing and Supplier Network


Harald Krüger Dr. - Ing. Klaus Draeger

Human Resources, Industrial Development

Relations Director
Ian Robertson

Sales and Marketing


Supervisory Board.

In accordance with the regulations contained in the German Co-


determination Act, BMW AG's Supervisory Board comprises ten

shareholder representatives (elected by the Annual General Meeting) and ten

employee representatives (elected by the employees):


Prof. Dr.-Ing. Dr. h.c. Dr.-Ing. E.h.Joachim Milberg, Chairman

Manfred Schoch*, Deputy Chairman

Stefan Quandt, Deputy Chairman

Stefan Schmid*, Deputy Chairman


Dr. Karl-Ludwig Kley, Deputy Chairman

Bertin Eichler*

Franz Markus Haniel


Prof. Dr. Reinhard Hüttl

Prof. Dr. rer. nat. Dr.-Ing. Henning Kagermann

Susanne Klatten

Prof. Dr. Renate Köcher


Robert W. Lane

Horst Lischka*

Willibald Löw*

Wolfgang Mayrhuber
Werner Neugebauer*

Franz Oberländer*

Anton Ruf*

Maria Schmidt*
Werner Zierer*

*employee representatives
• Business Intrest
Along with its automotive concerns, the BMW Group's activities comprise

the development, production and marketing of motorcycles, as well as

comprehensive financial services for private and business customers:


Automobiles.

With BMW, MINI and Rolls-Royce Motor Cars, the BMW Group is the

world's only car maker to pursue a purely premium strategy for all market

sectors covered by its brands, from exclusive smaller cars to top-of-the-


range luxury limousines.

Motorcycles.

Premium is the key word for BMW Group motorcycles as well. We have
enjoyed great success with our strategy: to develop and build the best

motorcycles, set standards with regard to technology, environmental

protection and safety, and provide outstanding customer service in the pre-

and after-sales phases.


Financial services.

We see financial services as a key factor for success in today's mobile

world. We have established an extensive product portfolio which supplies


expert information and advice for situations and questions relating to the

finance sector. We provide the following services: financing and leasing,

asset management, dealer financing and company car pools.


• Locations
Headquarters.

BMW Group activities worldwide are co-ordinated from the corporation’s

head office in Munich. A city landmark, the “four-cylinder” tower at the

Olympic park is the nerve centre for an organisation which covers over 150
countries.

Research and development.

The BMW Group recognises the importance of being present in markets


around the world in order to recognise trends early on and harness them to

create innovations for tomorrow.

Our research and development centres are: BMW Group Research and

Innovation Center (FIZ), Munich; BMW Group Research and Technology,


Munich; BMW Group Car IT, Munich; Innovation and Technology Center

in Landshut Plant; BMW Group Designworks, Newbury Park, USA; BMW

Group Engineering and Emissions Test Center, Oxnard, USA; BMW Group

Technology Office, Palo Alto, USA; BMW Motoren GmbH Steyr, Austria;
BMW Group Technology Office, Tokyo, Japan; BMW Group Development

Office, Beijing, China.

Produktion.

The worldwide production network of the BMW Group is the backbone for
growth in all our global markets. Thanks to the close cooperation between

all of the plants, manufacturing takes place quickly and flexibly. This

creates significant advantages in the international market. The BMW Group

currently has 17 production facilities in six countries:


Berlin plant, Dingolfing plant, Eisenach plant, Contract production in Graz

(Austria), Goodwood plant (GB), Hams Hall plant (GB), Landshut plant,

Leipzig plant, Munich plant, Oxford plant (GB), Regensburg plant, Rosslyn

plant (South Africa), Shenyang plant (China), Spartanburg plant (USA),


Steyr plant (Austria), Swindon plant (GB), Wackersdorf plant.

Assembly.

he BMW Group currently engages in assembly with the help of external


partners in the following countries:

Jakarta, Indonesia; Kaliningrad, Russia; Cairo, Egypt; Kuala Lumpur,

Malaysia; Rayong, Thailand; Chennai, India.


Sales and marketing.

The BMW Group is committed to maintaining and enhancing its presence in

key markets worldwide. BMW Group marketing subsidiaries are present in

the following countries:


Argentina, Australia, Austria, Belgium, Brazil, Canada, Denmark, Finland,

France, Germany, Great Britain, Greece, Hungary, Indonesia, Ireland, Italy,

Japan, Luxembourg, Malaysia, Mexico, Netherlands, New Zealand,

Norway, Singapore, Poland, Portugal, Russia, South Africa, South Korea,


Spain, Sweden, Switzerland, Thailand, USA

• Compliance
The BMW Group's corporate culture is shaped by clear responsibility,

mutual respect and trust. However, the risk of violations arising from

individual misconduct can never be completely ruled out. The BMW Group

makes every effort to minimize these risks wherever possible. For this
purpose, a Compliance Organization has been created and equipped with

measures and instruments to help employees and managers avoid legal risks.

The focus of the BMW Group Compliance Organization is on ensuring legal

compliance. Together with the BMW Group's environment and social


initiatives, it forms the cornerstones of its corporate responsibility.

The elements of the Compliance Organization apply to all BMW Group

units worldwide. Where additional compliance requirements exist in


individual countries or business sectors, these will be met by adopting local

or business-specific compliance measures.


CORPORATE FACTS

• CORPORATE STRATEGY
Identifying potential and encouraging growth. Knowing what we represent.

Recognising where our strengths lie and making the best use of every

opportunity. Following a clear strategy. Goals we have attained are in

essence the point of departure for new challenges. This is the philosophy
that inspires every individual at the BMW Group. It influences the

company's structure and it plays a vital role in the decision-making process.

Our corporate ethos finds its expression in the uncompromising pursuit of

the superlative. The result? Outstanding brands with an unmistakable


profile. Automobiles and motorcycles which fascinate people all over the

world and which win legions of new admirers every day. And a degree of

success which sees the BMW Group go from strength to strength.


With the three brands, BMW, MINI and Rolls-Royce Motor Cars, the BMW

Group has its sights set firmly on the premium sector of the international

automobile market. To achieve its aims, the company knows how to deploy

its strengths with an efficiency that is unmatched in the automotive industry.


The strategic objective is clearly defined: The BMW Group is the leading

provider of premium products and premium services for individual mobility.

• Financial Overview
2005 2006 2007 2008 2009
Capital expenditure as a percentage
8.6 8.8 7.6 7.9 6.8
of revenues
Operating Cash Flow as a percentage 161.3 125.8 152.4 108.7 144.4
of capital expenditures in

Automobiles Segment*
Return of sales before taxes 7 8.4 6.9 0.7 0.8
Equity ratio
Industrial operations* 39.1 40.6 41.2 42.3 41.7
Financial operations** 10.4 10.4 6.9 5.4 6.0
Equity as a percentage of non- 35.7 37.9 38.4 32.5 32.1
current assets
Non-current provisions and liabilities
62.1 62.1 59.1 66.5 72.8
as a percentage of non-current assets

* Industrial operations until 2006 - from 2007 on Automobiles segment


** Financial operations until 2006 - from 2007 on Fnancial Services
segment
2005 2006 2007 2008 2009
Revenues 46,656 48,999 56,018 53,197 50,681
Capital expenditure 3,993 4,313 4,267 4,204 3,471
Operating Cash Flow 6,184 5,373 6,246 4,471 4,921
Depreciation and amortisation 3,025 3,272 3,683 3,676 3,603
Equity 16,973 19,130 21,744 20,273 19,915
Balance sheet total 74,566 79,057 88,997 101,086 101,953
Non-current assets 47,556 50,514 56,619 62,416 62,009
Non-current provisions and 29,509 31,372 33,469 41,526 45,119
liabilities
Profit before tax 3,287 4,124 3,873 351 413
Income taxes 1,048 1,250 739 21 203
Net profit/-loss for the year 2,239 2,874 3,134 330 210
• Corporate Governance
Background.

Management and supervisory boards of companies listed in Germany are

required by law (§161 German Stock Corporation Act) to report once a year

whether the German Corporate Governance Code (in the relevant version)
has been, and is being, complied with. Companies affected are also required

to state which of the recommendations of the Code have not been, or are not

being, applied.
Corporate governance in the BMW Group.

For the BMW Group, corporate governance is an all-embracing issue which

affects all areas of the enterprise. Transparent reporting and a policy of

corporate governance aimed at the interests of stakeholders are well-


established traditions within the BMW Group. Cooperation between the

Board of Management and the Supervisory Board, in an atmosphere of

commonly shared trust and responsibility, has long been the basis for

managing the affairs of the BMW Group. The underlying corporate culture
at BMW is founded upon the principles of transparency, placing trust in

others and taking responsibility for one's own actions.

The Board of Management and Supervisory Board of Bayerische Motoren


Werke Aktiengesellschaft believe that the recommendations and suggestions

contained in the German Corporate Governance Code contribute to an

enhancement of the financial markets in Germany, in particular for

international investors. The implementation of the Code in Germany has


established standards for corporate governance which address the interests

of shareholders and other stakeholders alike. The German Corporate

Governance Code is especially suited to achieving this objective.


The Board of Management and Supervisory Board are in favour of the

recommendations and suggestions contained therein and have developed a

corporate governance code for the BMW Group, taking account of the

specific circumstances of the BMW Group. The aim is to provide


shareholders and other stakeholders with a comprehensive and standalone

document covering the corporate governance practises applied by the BMW

Group.
A coordinator responsible for all corporate governance issues reports

directly and on a regular basis to the Board of Management and Supervisory

Board
• Sustainablity

The BMW Group's strategy is geared to longterm, profitable growth. In

order to achieve this goal the company is carrying out the largest product
and market offensive in its history. In doing so the company consequently

complies with the principles of sustainability, integrating not only

economical, but also ecological and social factors into all decisions and

processes.
It is the claim of BMW Group to substantiate the proposition of

sustainability and integrate it in to daily business life. The targets are clearly

defined: It is essential to use resources gently and efficiently within the


company, to recognise risks and to strengthen the Group' s reputation

through responsible interaction with associates and society.

As a result we have been a member of the "Dow Jones Sustainability Group


Index" - the most important share index for companies dedicated to

sustainable business management - since 1999. The rise in this index

underpins that companies can also reap financial benefits through active

involvement in social and environmental concerns.


PRODUCT LIFE CYCLE

1. BMW¶s product life cycle is similar to the product life cycle on 11-

1 because the overall shape is the same and so are the first two stages.

It is different because BMW tries to keep its products in the first to


stages. It wants to keep them in the introductory and growth stages to

keep sales high. The maturity and decline stages have lower sales, so

they want to avoid those if possible.


2. To keep BMW¶s products in the first two stages of the product life

cycle, they regularly introduce new models in the 3 and X series. In

their seven-year product life cycle, BMW adds a new model each
year. This repositions them back in the introductory stage. They also

continually modify the series. This is part of the growth

stage, which is where the 3 and X series are currently. By adding new

features and improving upon the original model they are


differentiating from competitors and gaining as much distribution as

possible.

3. BMW utilizes the marketing strategies of modifying the product

and modifying the market. BMW modifies its product by adding new
features and other capabilities to the car. They modify their market by

expanding their market to different groups. In the past they expanded

to women, African Americans, Asians, and Hispanics.


4. BMW¶s branding strategy is manufacturing. BMW sells various

models from their dealership. Its use a multibranding strategy. BMW

owns Rolls Royce and Mini as well. They also use multiproduct
branding. The automobiles of BMW are named differently. BMW

strategically named it cars under the brand. All of the design names

are clear and easy. For example, a 328 is a 3 series car with a 2.8-liter

engine. This is a simple and effective branding strategy. Also BMW


vehicles are featured in many movies. This high visibility product

placement creates a strong brand name and increase sales.

5. When creating a car online, I was able to chose my desired model

and customize tomy personal preferences. I was able to choose the


color, interior, type of drive, and add in whatever accessories I

wanted. I was able to include or disinclude anything I wanted. Also, it

was easy to see the various options and what each package included.
This is good because personally I don¶t exactly know all the

automobile terms.
MERCEDES – BENZ
Mercedes-Benz has been associated with India for more than 50 years.

Presently, Mercedes-Benz India’s engagement in India covers several

domains:

• Local production of Mercedes-Benz cars


• Making available imported Mercedes-Benz cars

• Commercial Vehicle operations,

• Global sourcing of auto components

• Captive automotive technology research and development


Social Involvement of Mercedes-Benz
Mercedes-Benz is also involved with social-oriented programs across India

like:

• ‘Biofuel from Jatropha’


• Road safety project for children

• Automotive education, etc.

Company Profile
Mercedes-Benz India has been delighting customers with strong brands and

a wide range of products equipped with the latest in automotive technology.

The company has been the pioneer of the luxury car segment in India with

its inception way back in 1995. It is the only luxury car maker in India to
have such a wide range of cars. The different ranges available today are the

S-Class, E-Class, C-Class, M-Class, CLS-Class, SLK-Class, CL-Class, GL-

Class and the Maybach. We have also already introduced our high

performance AMG cars in India off late.


The depth of choices within these ranges is also extensive with different

petrol and diesel engines. The time difference between the global and Indian
launch of its latest models is constantly optimized. We strive to make them

available in the shortest time possible.


Research & Development
‘Mercedes-Benz’ stands for tradition, innovation and the future of the

automobile and represents quality and safety on roads throughout the world.

Mercedes-Benz Research and Development India Pvt. Ltd. (MBRDI), a


100% captive unit of Daimler AG, was established as a research institute

with eight employees in 1996 and currently has a capacity of 367

employees.
Based in Germany, Daimler AG with its business units Mercedes-Benz

Cars, Daimler Trucks, Daimler Financial Services, Mercedes-Benz Vans

and Daimler Buses, is a global leading producer of premium passenger cars

and the largest manufacturer of heavy- and medium-duty trucks in the


world.

The company’s founders, Gottlieb Daimler and Carl Benz, continued to

make automotive history following their invention of the automobile in


1886. As an automotive pioneer, Daimler and its employees are committed

to excellence and act responsibly towards society and the environment, to

shape the future of safe and sustainable mobility with groundbreaking

technologies and high-quality products.


MBRDI is the largest Research and Development center of Daimler AG

outside Germany and contributes in the areas of Computer Simulation

(CAE), Design (CAD), Electrical/Electronics and IT-Services. Research and

development engineers at MBRDI assess the performance and reliability of


various sub-systems and contribute to product development in all the stages

of the life-cycle.

Organised in extended teams, the engineers collaborate with our partners in


the Research & Development Centers and Business Units in Germany,

Japan and the USA. To prepare our employees for an effective collaboration

in distributed teams across cultures, MBRDI provides languages-classes as

well as intercultural trainings and workshops.


POLITICAL
Legislation
Environment - The EU are bringing in a new legislation that the average

CO2 emissions from new European cars must be cut to

130g/km by 2015.
 Competition - legal restraints on competition within the EU car industry

are expected to drop substantially over the next 5 years

Taxes and Duty- MOT, price increased. Road tax directly linked to

amount of emissions
Subsidies- The Government has today met the automotive sector to

discuss the help available to the stricken industry. Commenting, David

Frost,

Director General of the British Chambers of Commerce (BCC), said


ECONOMIC
Recession/Boom. Due to the current economic crisis Mercedes along with

other car manufacturers are finding it increasing difficult to sell cars and

many have even closed plants.


Exchange Rate- Euro v £ Could make Mercedes more expensive in the

UK

SOCIAL
 The social factors can be broken down according to the following

demographics:

 Age

 Gender
 Income

Which age group are interested in the Mercedes company?

 Mercedes products are mainly targeted at middle aged people. They

are not very popular with youngsters as the brand is expensive and
is very hard to get insurance on at such a young age.

What Social class are most likely to purchase Mercedes

cars ?

 Due to their relative expense, Mercedes are targeted at people of


middle to high incomes. Unlike Vauxhall, for instance, Mercedes

doesn't offer different prices ranging from high to low so the

products don’t really appeal to consumers with a low income

 The social factors can be broken down according to the following


demographics:

 Age

 Gender

 Income
Which age group are interested in the Mercedes company?

 Mercedes products are mainly targeted at middle aged people. They

are not very popular with youngsters as the brand is expensive and

is very hard to get insurance on at such a young age.


What Social class are most likely to purchase Mercedes

cars ?

 Due to their relative expense, Mercedes are targeted at people of

middle to high incomes. Unlike Vauxhall, for instance, Mercedes


doesn't offer different prices ranging from high to low so the

products don’t really appeal to consumers with a low income

TECHNOLOGICAL
Safety- Advances in technologies such as shatter-proof windscreens, air-

bags, crumple zones and collapsible steering columns have made it possible

to manufacture safer cars.

Safety sells
Plant Efficiency- New Production methods that

improve efficiency.

E- commerce

Gizmos
SWOT

ANALYSIS
SWOT ANALYSIS


Strengths
Strong brand name

Owners club

Successful F1 team

Good Resale Value


Good relationship with

the government

Weaknesses
Price

Opportunities
Development of new models

Environmentally friendly cars


Threats
The current economic crisis

Strong competitors

New entrants into the Market


RIVALRY AMONG FIRMS

The rivalry among firms in the same market as Mercedes-


Benz is highly intense.

The main competitors within this segment include:

 BMW

 AUDI
 JAGUAR

 ASTON MARTIN

 ALFA ROMEO
Rivalry has led to firms producing similar range of vehicles, as well as

expanding into new products or services e.g. financial services, alcoholic

products etc.
THREAT OF NEW ENTRANTS

Segment is at low risk to the threat of new entrants.

This could be down to the following reasons:

 PRESTIGE: existing companies have set up their prestige over several


years of providing quality products in the market.

 MATURE/SATURATNIG MARKET: the segment is at a saturated point

where growth isn't as high as the rest of the market.

 SET-UP COSTS: the set up costs are high in this segment.


 CUSTOMER BASE: consumers within this market are likely to have

developed tastes for specific brands


THREAT OF SUBSTITUTES
Mercedes-Benz has numerous substitutes that it has to be weary of. These
include:
 ALTERNATIVE TRANSPORT: this includes means such as buses,

trains, motorbikes and planes.

 ALTERNATIVE PRESTIGE PURCHASES: because Mercedes-Benz

vehicles are considered luxury products, they also have to be cautious of


other prestigious products that consumers could buy instead of ‘fancy’ cars.

These include:

 Designer Clothing

 Expensive/Collector’s Furniture
 Holidays

 Luxury Homes

 Art e.g. Paintings, Sculptures etc.

 Jewellery
 Boats/Yatches

BARGAINING POWER OF SUPPLIERS


The bargaining power of suppliers is influenced by numerous

factors. These include the position of rival suppliers, the quality of goods

and services supplied; the demand for goods and services; and the supply of

goods and services.


Mercedes-Benz’s suppliers provide them with an array of raw materials

required in car manufacturing, including metals, leather, electronics, paints

and rubber.
Additionally, since Mercedes-Benz prides its products on their quality,

suppliers could increase their bargaining power through emphasizing the

superiority of their goods.

Mercedes-Benz deals with two types of consumers, each with


their own bargaining stance:

 COMMERCIAL: these are large scale buyers e.g. companies who

purchase fleets. Their bargaining power can be increased by the

scale of business they could offer the company and the presence of
alternatives.

 INDIVIDUAL: these are personal buyers. Their bargaining power is

usually less than that of their commercial counterparts, however,

the strength of rival brands and provision of substitutes are key


factors that can affect their buying position.
Strategic Scope

The strategic scope shows the size and composition of the

target market. In Mercedes-Benz's case, the vehicle market

in the UK is worth £33bn in new cars and £35.1bn in used


cars. Of this, Mercedes-Benz have a low market share,

however, this is compensated by the revenue generated

through their medium to highly priced products.

The overall market contains various specifications of vehicles,


of which Mercedes-Benz is represented in all of them. This

means that across the board, the firms market share will

differ from range to range.

Strategic Strength

Strategic strength looks at the core competency of the business.

The core competency refers to how well the firms conducts it

'basic' trading roles. Michael Porter (1980) pointed out 3 values that made up successful

core competency:
 Provides consumer benefits

 Not easy for competitors imitate

 Can be applied to a variety of products and markets

Of the core competencies, the two methods that are used are:

 Product Differentiation
 Product Efficiency
MERCEDES GENERIC STRATEGY

Through utilising Porter's generic strategy, we have been able

to identify that Mercedes-Benz's generic strategy targets

the following market:


 NARROW MARKET - Mercedes' consumers fall within the

minority of the market i.e. those of higher incomes, who

want a luxurious product to associate with their lofty status.

 DIFFERENTIATION FOCUS - Mercedes' strategy to distinguish


them from rivals is one of differentiation, through providing both a

luxurious vehicle, as well as one that is up to par with the latest performance

figures.

STRATEGIC FIT
Strategic fit refers to how a firm adapts its business practices

to deal with changes in the external environment.

As the motor-vehicle market is currently in a slump, it is


essential that Mercedes-Benz react appropriately to maintain their

competitiveness in the market.

 Taking into account Mercedes' strengths, it is well equipped to deal with

the current changes in the external environment.


 Their strong brand name ensures that up-and-coming professionals will

always aspire to own a Mercedes car to adopt the prestige associated

with the brand. This will stay constant even throughout times of

economic upheaval.
 Additionally, the good resale value of their products will mean that

buyers will not be as worried about the depreciation value of the car

should circumstances force them to sale it on.

 Lastly, the businesses good relationship with the government and EU will
mean that they could rely on tax reductions and stimulus packages

should production be heavily affected by the motor vehicle crisis.

 On the downside, the price will still be a hindrance when trying to attract

new custom, especially given the hardship experienced when trying to


obtain finance from creditors.
PRODUCT SUGGESTION

We would suggest that Mercedes-Benz


considered developing a product that would be suited to today's economic

climate and social trends.


Such a product would be relatively cheap (although not so cheap as to

compromise their luxury status), have low running costs and be highly eco-

efficient.
ADVANTAGES

OThe new product has wider target market.

OAttract consumers with a high, as well as middlelow


incomes.

OSmaller engine will help reduce petrol cost.

OInsurance will be cheaper

OHas a lot of potential to be successful.


DISADVANTAGES
OMay compromise Mercedes-Benz's luxury product status.

OResearch & Development into product could be costly, as well as

manufacturing costs.

OMay replace existing products in their range portfolio.


HYPOTHESIS
HYPOTHESIS
A hypothesis consists either of a suggested explanation for an

observable phenomenon or of a reasoned proposal predicting a possible

causal correlation among multiple phenomena. The term derives from the

Greek, hypotithenai meaning "to put under" or "to suppose." The scientific
method requires that one can test a scientific hypothesis. Scientists

generally base such hypotheses on previous observations or on extensions of

scientific theories. Even though the words "hypothesis" and "theory" are
often used synonymously in common and informal usage, a scientific

hypothesis is not the same as a scientific theory.

Hypothesis may be defined as a proposition or a set of proposition set

forth as an explanation for the occurrence of some specified group of


phenomenon either asserted merely as a provisional conjecture to guide

some investigation or accepted as highly probable in the light of established

facts. Quite often a research hypothesis is a predictive statement, capable of


being tested by scientific methods, that relates an independent variable to

some dependent variable.


NULL HYPOTHESIS

A null hypothesis is a hypothesis (within the context of statistical

hypothesis testing) that might be falsified on the basis of observed data. The
null hypothesis typically proposes a general or default position, such as that

there is no relationship between two quantities, or that there is no difference

between a treatment and the control. The term was originally coined by

English geneticist and statistician Ronald Fisher.


The null hypothesis (often denoted by H0) formally describes some aspect
of the statistical "behaviour" of a set of data.

H0 : There is no significant difference in the customer satisfaction level


using cars of BMW Motors & Mercedes – Benz
ALTERNATE HYPOTHESIS

Alternative hypothesis is the "hypothesis that the restriction or set of restrictions to be

tested does NOT hold." Often denoted H1. Synonym for 'maintained hypothesis.'
H1 :There is no significant difference in the customer satisfaction
level using cars of BMW Motors & Mercedes - Benz
RESEARCH
METHODOLOGY
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.

Steps In Sampling

Sampling Frame:
The list of sampling units from which sample is taken is called sampling

frame.

Delhi City map was studied thoroughly and samples were selected from the

place in a scattered manner to get effective result.


SAMPLING SIZE:

Total sample size is 50. The following sample size according to area wise is

as

follows:
10 Saket

 20 Malviya Nagar

 20 South Campus
SAMPLING PROCEDURE:

Sampling technique

The selection of respondents were accordingly to be in a right place at a

right time and so the sampling were quite easy to measure, evaluate and co-
operative. It was a randomly area sampling method that attempts to obtain

the sample of convenient.

Limitations of the Study


· I will have to rely upon the information get from secondary sources

(Balance sheet, Profit & Loss Account and Cash Flow ) and given by

respondents, which may not be fully true.

· This study will be limited to only some areas of New Delhi only..
· It is only for short period of time.

· Lack of professional approach since researcher is a student

· The sample size is only 50 so the sample may not be truly representative of

the Delhi population.


Field Work
I have collected the data through medium called questionnaire collecting the

responses from 50 people in all. I had done my field work in the following

area.
difficulty during my project in the process of explaining and taking there

SAKET , MALVIYA NAGAR , SOUTH CAMPUS

I started my project very first educating the respondents about my entire

project, and ask them to co–operate with me. Mostly all the respondent were
aware of this type of surveys. So I didn’t face any type of difficulty in the

questionnaire.
DATA

ANALYSIS
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 Group

Age:
1
2
1) Below18 : 0 3
4
5
2) 18-25 : 5
3) 26-35 : 20

4) 36-50 : 20

5) 51 and above : 5
Occupation:

1) Service
Occupation

2) Business
1
2
3) Student 3
4
4) Housewife
Q.1) In your Opinion Which car is the Best ?
Mercdes
a) BMW ( 68%) BMW
1 2

b) Mercedes Benz ( 32% )


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

a) Less than 1 year 8


b) 1- 5 20
c) 5-10 15
d) More than 10 7
1
2
3
4
Q.3) How would you rate BMW Motors on the following parameter?

Strongly disagree

Disagree
Neither agree Nor disagree

Agree

Strongly Agree Knowledge of Sales Person

1 2

3 4
i) 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%

1 2

3
iii) Display of merchandise is attractive
Agree : 70%

Strongly Agree : 30%

iv) Availability of the product

Agree : 50%
Neutral : 20%

Disagree : 30%
v) Variety/selection of merchandise

Agree : 40%

Disagree : 30%
Neutral : 30%

vi) Vehicle in good condition


Agree : 80%

Neutral : 20%

vii) Prices are affordable

Agree : 40%
Disagree : 30%

Neutral : 10%

Doesn’t Matter : 20%

viii)Attractive discounts offered


Disagree : 80%

Agree : 10%

Neutral : 10%
ix) Décor of the waiting area is pleasing

Agree : 70%

Disagree : 10%
Neutral : 20%

x) Offered a test drive

Yes : 90%

No : 10%
xi) Post sales follow ups are done regularly

Yes : 70%

No: 10%

Cant Say : 20%


xii) Responds to complaints quickly

Agree : 90%

Disagree : 5%

Neutral : 5%
xvi) Careful with personal information

Agree : 95%
Cant Say : 5%

Q.3) Are you aware of the following facilities provided by BMW Motors?
FACILITIES Yes No

i) Motors insurance

Yes : 60%

No : 40%
ii) Extended warranty

Yes : 80%

Cant Say : 20 %

iii) True value


No Response

iv) finance

Yes : 90%

No : 10%
v) Owner’s Club

Yes : 100%

No : 0%
vi) Genuine accessories

Yes : 100%

No : 0%
Q.4) Which Car Have the best Aftersales Service ?

a) BMW
b) Mercedes Benz
AfterSales Service

Mercede
BMW
1
2
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

1
2
3
4
5
Q.6) How likely would you recommend BMW over MERCEDES BENZ ?
Very Very
Unlikely Likely
1 2 3 4 5
1
2
1:0 3

2 : 10 4
5
3 : 25
4 : 15
5:0
Q.7) Which Car provide the Best Value for Money
a) BMW : 25
b) Mercedes Benz : 25

1
2
Q.8) Which Car provides you wide range of Accessories and Add-ons ?

a) BMW : 20
b) Mercedes benz : 30
Accessories

BMW
Mercedes
1
2
Q.9) Which of the following Features of BMW you pefer more over
Mercedes Benz ?

a) Sun Roof : 5
b) Auto Visulaizer : 1
c) Auto Sensors Wipes nd Park : 5
d) Control panel : 4
e) Drive Controls : 10
f) Cruise Controls : 15
g) Convertible Roof : 10
Accessories

1
2
3
4
5
6
7
Q.10) Which Company provides More Powerful and Well Tuned
Engines ?

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

1
2
3
Q.11) Which Engine make you prefer the Most when you Buy a luxury
car ?

a) V6 : 9
Engine
b) V8 : 10
c) V12 : 15
d) VTVT : 10 CRDi V6
1
e) CRDi : 6VTVT V8 2
V12 3
4
5
FINDINGS
FINDINGS
On an average more than 73% people feel that the prices are affordable

whereas 12% do not agree, 74% believe that attractive discounts are offered

whereas 26% are not satisfied with the discounts offered. 20% said that the

test drives are not offered and 15% said that post sales follow ups are not
done regularly whereas 85% said that they were done regularly but people

feel that it is the people’s car as it is satisfactory on all other parameters:

knowledgeable sales persons , employees spent enough time before and

during sales, display of merchandise is attractive, availability of product,


variety of merchandize, vehicle in good condition, prices are affordable,

attractive discounts are offered, décor of the waiting area is pleasing,

responds to complaints quickly, service at Motors service station is

excellent, careful with personal information and is value for money . The
overall opinion about Motors is very good. 86% people agreed that the sales

persons are knowledgeable and 14% strongly disagreed that the sales

persons are knowledgeable. 64% people agreed that the sales persons spent
enough time with them before the sales and 36% strongly agreed with this.

62% agreed that sales persons

spent enough time with them during the sales, while 34% strongly agreed

that the sales persons spent enough time with them during sales and only 4%
disagreed with this. 60% agreed that the sales persons spent enough time

with them after sales, 26% strongly agreed with this and 14% disagreed that

the sales persons spent enough time with them after sales. 94% agreed that

the display of merchandize was attractive and 6% strongly agreed that the
display of merchandize was attractive. 91% agreed that the availability of

the product was there, 5% strongly agreed that the availability was there

while only 4% said they disagreed with this.


87% agreed that there was variety/selection of merchandize whereas 7%

strongly agreed that enough variety was there and 6% disagreed with this.

82% agreed that the vehicle was in good condition when delivered, 16%

strongly agreed with this whereas only 2% disagreed with this. 64% strongly
agreed that the prices are affordable, 21% agreed that the prices are

affordable whereas only 15% said that they neither disagreed nor agreed

with this. 55% agreed that the discounts offered are attractive, 34% strongly

agreed with this while 11% disagreed and said that the discounts offered
were not attractive. 80%agreed that the décor of the waiting area was leasing

while 20% strongly agreed that the décor of the waiting area was pleasing

74% agreed that the test drive was offered to them, 6% strongly agreed that

the test drive was offered while 20% disagreed with this. 59% agreed that
the post sales follow ups are done regularly, 26% strongly agreed and

15%disagreed with this. 4% agreed that the response to complaints is quick,

18% strongly agreed, 12% neither agreed nor disagreed and 6% disagreed

with this.
82% said that the service at service station is excellent, 14% strongly agreed

while only 4% disagreed with this. 85% agreed that yes they were careful

with personal information,strongly agreed with this and 8% neither agreed

nor disagreed. 94% strongly agreed that all the commitments were fulfilled
and 6% agreed with this. 98% said yes that they are aware about insurance

while only 2% said that they were not aware.


CONCLUSION
As per details of Survey Report Analysis and after Verifying all the other

details included in my study ,

In my opinion BMW is performing well , as per current scenario Mercedez –

Benz was the market leader but BMW with its features and Design
Mechanism is successful in attracting the youth so the demand for BMW is

increasing.

BMW is getting preference so currently both are at equal position but in

near future BMW will crossover Mercedes-Benz market legacy .


BIBLIOGRAPHY
BIBLIOGRAPHY

Books:

1. Philip Kotler, Kevin Keller (2009),

Marketing Management (Thirteenth Edition)


2. Marketing Management, The McGraw.Hill

Company Rajan Saxena (Third Edition)

MAGAZINES:

A) OUTLOOK BUSINESS (FEB, 2009)


B) BUSINESS STANDARD (April-July 2009)

C) 4P’S OF BUSINESS AND MARKETING (June 2009)

D) BUSINESS TODAY - Pick and Choose

E) BUSINESS TODAY - Tata Motors to bring Jaguar, Land Rover to India


INTERNET:

1. BMW Motors' Official Website


2. Wikipedia

3. http://www.docasi.com/ 4. http://www.capitaline.com

5. Mercedes Official Site

6. Scridb.com
7. http://money.rediff.com/companies/

8. htttp://www.moneycontrol/com/

9. http://www.yahoofinance.com/t

10. http://www.carwale.com/research/cars/
ANNEXURE
QUESTIONARE
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

i) Knowledgeable sales person


ii) Employees spent enough time after sale service
with you:
before sales
During sales
After sales

iii) Display of merchandise is attractive


iv) Availability of the product

v) Variety/selection of merchandise

vi) Vehicle in good condition

vii) Prices are affordable


viii)Attractive discounts offered

ix) Décor of the waiting area is pleasing

x) Offered a test drive

xi) Post sales follow ups are done regularly


xii) Responds to complaints quickly

xvi) Careful with personal information

xv) All the commitments are fulfilled

xvi) Value for money


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) Owner’s 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
1 2 3 4 5

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) Sun Roof
i) Auto Visulaizer
j) Auto Sensors
k) Control panel
l) Drive Controls
m) Cruise Controls
n) 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) V6
g) V8
h) V12
i) VTVT
j) CRDi
Date:

Customer Sign.