BMW:

a Beloved Marketing
Wonder?
 International Marketing
Tutor: Ms Liu, J
TUTORIAL GROUP 12 TEAM 2

Ilse Spoelstra (1866907)

Nicole Lodder (1902202)
Thijs Hofland (1942778)
Roland Wijdenbosch (1812882)
15.02.10

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Introduction

This report will be an overview of BMW’s current position in the world market. Not
only will their past performance and activities be discussed, attention will also be
paid to strategies, marketing and miscellaneous topics.

BMW’s activities will be thoroughly assessed, while maintaining the structure of a

relatively concise report. Questions that were asked are, what countries is BMW
active in? How have they internationalized? What has BMW performed in the
past? And how will they perform in the future?

What kind of marketing does BMW use? What is important in promotion and
price? And what other topics are important for BMW?

Relevant issues are of course the financial crisis and what impact that has had on
BMW, how and whether they coped with theseis rough years positively and what
their future plans are.

In this report we hope to give answers to all these questions and more, using
graphs, charts and other data to illustrate the answers.

To conclude we will summarize the most important findings for a short overview
of BMW’s current status.

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1. General Introduction to the company
BMW is a company having over 90 years of experience, in which the top end of
the car market was both targeted and reached, while having enhanced its
expertise.. Its origins are rooted all the way back in to 1916 when they founded
the ‘Bayrische Flugzeugwerke’ (BFW) and the ‘Bayrischen Motor Werke’ (BMW) in
19171. Their pre-Ssecond World War production involved aircrafts, engines and
motorcycles2. It was only after the Second World War when BMW expanded their
production with cars. Besides their own brand, BMW was involved in various
acquisitions, such as the Rover Group in 1994, which was only held administered
for 6 years when Rover and MG were resold again3. Furthermore, they realized an
acquisition of a brand, which was and still is known today for its excellent quality
and its well known reputation, namely Rolls Royce4. With this brand they have
entered the most expensive car manufacturing segment.

BMW is not only popular for the its excellent quality cars including its design and
logic behind it, but also the for its after sales services5. Most customers and
people in general will be most familiar with the automobiles BMW 3 and 5 series.
However, very recently BMW has expanded its family with the production of the
BMW 6 and 7 series6. BMW also has two more different automobile segments,
which are namely, the BMW Z series and the SUV segment7. In today’s fierce
competition of fuel efficiency and easily to handle cars, they also produce small
cars, the BMW 1 series and the MINI models.

Although Tthe origins of the company are in Germany, where also its
headquarters are located in Munich8, the company’s objective to become the best
premium car manufacturer in the world forces them to operate beyond their own
borders.”. Having the objective to become the best premium car manufacturer in
the world, it will not be a surpriseSubsequently, that they also have foreign
research and development centerscentres, for example the R&D Triangle in the
United States in California9. BMW is indeed located globally, which started off in
1973 with setting up a manufacturing plant in South Africa, while, furthermore,
they are producing in countries worldwide, such as Austria, USA, Egypt, India and
China10.

There is a whole process involved with the production of the BMW products. More
than 100’00011 people are working in the BMW Group12. In normal circumstances,
BMW is making revenues of over 53 million euro13, as it sells almost 1.5 million
cars annually14. BMW has and is likely to continue to experience ups and downs
through its existence, like the financial crisis today. It is not a company that
functions like a cash cow, rathermoreover a company that does not stop to be
innovative. BMW strives to make their cars fuel efficient and provides great after
sales services. For the near future fuel efficiency is an advantage when the oil
prices are likely to increase, and evidently of course it reduces the CO2 emissions.

1
http://bmwgroup.com
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IBID
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IBID
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IBID
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http://www.bmw.nl
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IBID
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IBID
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http://bmwgroup.com
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IBID
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IBID
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BMW annual Report 2007
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IBID
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IBID
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IBID
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2. BMW’s activities
2.1 BMW overview of activities

BMW is merely a subdivision of a larger concern called the BMW Group, which
owns two more car brands additionally, namely BMW group consists of three car
brands; BMW, Mini and Rolls-Royce. Mini and Rolls-Royce are brands that have
been acquired by BMW through acquisition. These two brands have their own
production facilities located in the United Kingdom. BMW also produces
motorcycles, which unlike their automobile counterparts are produced centrally
at the Berlin plant. This due to the relative small market for motorcycles
considering the annual output of BMW motorcycles is approximately 100.000
units compared with the 1.5 million units of automobiles. Furthermore, the
Husqvarna motorcycle brand has been acquired by the BMW group in 2008. This
brand has its own production facilities in Italy.

BMW group has triggers activities in over 150 nations around the globe. In order
to respond on to market trends the company has Research and Development
centres in the United States, Germany, and Japan. Marketing and Sales are also
located in key markets around the world.

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BMW cars are also produced all around the world. In total there are 14 plants that
are responsible for the production of automobiles and components. However, it
is necessary to make a distinction between the BMW manufacturing facilities.
These can be divided into four categories, which are; Outsourced production,
Joint Ventures, Assembly plants and Production plants. Furthermore, Production
plants can be divided between full automobile production and component
production.

Firstly, BMW only merely has one outsourced production facility. This plant is
located in the Graz, Austria and only produces the X3 series. Moreover, BMW still
retains tight control over the plant concerning this model. This was a temporary
contract to augment the production capabilities of the X3 series.16

Secondly, BMW has a joint venture with Brilliance China Aautomotive Hholdings
to produce cars locally in China. It is only possible to enter the Chinese market

15
http://www.bmweducation.co.uk/coFacts/view.asp?docID=75
16
http://www.bmwgroup.com/e/nav/index.html?
http://www.bmwgroup.com/e/0_0_www_bmwgroup_com/produktion/produktionsnetzwerk/
produktionsstandorte/produktionsstandorte.shtml
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through a joint venture. These cars are produced solely for the Chinese market.17

Thirdly, BMW assembly plants do not actually produce cars but only merely
assemble them. This is called a “completely knocked down” process.
Components are shipped in parts to assembly plants. On site, the parts are
assembled into complete cars. In this way, BMW can export cars without dealing
with strict tariffs. Currently there are 6 assembly plants located in Thailand,
Malaysia, Egypt, Russia, Indonesia and India.18

Finally, the production plants can be roughly divided into two categories. These
categories are: component production and automotive production. Component
production plants produce parts and engines for the BMW group worldwide.

Automotive production takes places in 6 plants. These plants are located in

Dingolfing, Leipzig, Munich, Regensburg, Rosslyn and Spartanburg. All these
plants produce the various s Series. For instance, the Leipzig plant produces the
BMW 1, 3 and X1 series, while. While the Spartanburg plant in the United States
produces the X5 and X6 series.

Overview of BMW group production facilities19

Furthermore, these plants have been placed into are allocated to strategic
locations. As mentioned beforeearlier, the BMW plant in the United States
produces X5 and X6 series. These are Sports Utility Vehicles - a category of cars
that have a large share in the overall US car market. However, the majority of
these plants produce the cars for worldwide sale.

In conclusion, BMW utilizes applies various production methods to distribute their

products around the world. The bulk of their products are produced by BMW
owned plants. HoweverAlternatively, the company also utilizes outsourcing and
joint ventures. Furthermore, BMW can also reach markets by using assembly
plants. This is done to circumvent various local protection measures. In addition,
through the use of market subsidiaries the company can keep upconform to with
regional market trends.
17
BMW closes deal to make 30,000 cars in China." Automotive News 77.6031 (2003): 4.
Business Source Premier. EBSCO. Web. 14 Mar. 2010.
18
http://www.bmwgroup.com/e/nav/index.html?
http://www.bmwgroup.com/e/0_0_www_bmwgroup_com/produktion/produktionsnetzwerk/
produktionsstandorte/produktionsstandorte.shtml
19
http://www.bmwgroup.com/publikationen/e/2009/pdf/fasz_produktion.pdf

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3. BMW’s performance in the last five years
The last five years our economy has been volatile, considering in 2004, 05’ and
06’ the economy was fairly stable, but in 2007 and 2008 a lot considerable
number of companies faced problems due to the economic crisiscredit crunch.

An interesting question that arises is

Hhow did BMW did perform in the past five years and whether they ? And has
BMW suffered from the economic crisis. ?
To investigate their performance, we use the annual report of 2008 is a useful
tool, which as it provides us with graphs indicating demonstrating the results of
the past five years. These graphs can be found in Appendix A.

BMW’s deliveries and production rose steadily from 2004 until 2007 with a total
growth percentage of almost 25 % for the deliveries and about 23 % for the
vehicle production.

In 2008, a significant decrease appeared, whereby the deliveries dropped with

5,8 % and vehicle production declined by 7,6 %. This downfall was caused by the
fact that American consumers became reluctant to spend in 2008.

The first BMW graph clearly shows the enormous setback the world economy
suffered in 2008. The high prices of raw materials, the recession of the US
property market and the financial crisis in 2008 had a severe impact on BMW’s
performance.

But did this crisis affect all car producers in the same way? Taking a look at the
annual report of Audi, one has to conclude that this is not the case. Profits before
tax at Audi group rose with 9% from 2007 until 2008, whereas BMW group’s
profits before tax in this periodose years dropped with 91%.
This is a very large difference between the two luxury car producers. It is,
however, impossible to conclude that BMW group did worse than Audi group
since BMW’s annual report of 2009 has not been published yet, which makes it
difficult to give any information aboutinterpret the exact revenues and profits in
2009 and about the current situation. In March of 2009 BMW announced that
instead of trying to make a profit in 2009, they will manage their costs and cash
flow instead.

BMW’s 2008 downfall may seem tremendous, but considering the impact of the
economic crisis one could conclude that BMW will resume generating’s profits will
rise again in the upcoming years.

In the third chart are BMW’s deliveries per model are represented as well as, and
the increase or decrease from 2007 until 2008. It is clear that BMW’s more
expensive cars were not sold as much as in the previous year, which most likely
is caused by the financial crisis. The model that does have an increase is the
three-door in the 1 series, one of BMW’s more affordable vehicles.

Once the financial crisis is over, there will be a market for both middle class and
high class BMW vehicles again, and enabling BMW will be able to attract more
customers for these models.

For now, car producers have to do all they can to survive the financial crisis and
to regain customers in the upcoming years. This is theThe same accounts for
BMW, from whom it will be interesting to see how they will develop in the five
forthcoming years that are yet to come.

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4. BMW’s international marketing activities
4.1 Target Marketing
There are three steps to be undertaken in order to determine the target market,
the first step being market segmentation, followed by target marketing, and
lastly market positioning20.
In the case of BMW one could argue that their market segmentation is a
combination of three.

Firstly, concerning income segmentation,21 BMW is not selling a mass product,

but cars at high prices, with their customers likely to have a relatively high
income. Secondly, psychographic segmentation occurs 22 as their customers can
be grouped to the upper middle class and upper class. Thirdly, Benefit
segmentation23; Mercedes and Audi can be regarded as competitors of BMW,
BMW tries to distance itself from them by offering after sales benefits to their
customers, which will be described more extensively later.

One can argue that BMW pursues a concentrated market (niche market)24. This
basically means that BMW is aiming for a one or just a few market segments. The
advantage of focusing on only one or few segments is that BMW can focus
explicitly on the needs of these segments of potential customers.

BMW is expected to have a ‘more for more’ positioning strategy25. In the case of
BMW it does not only offer higher quality compared to many of its competitors,
their product also gives status. The downturn of being a ‘More for more’ product
is that one can be vulnerable in situations similar to a financial crises.

4.2 Product Strategies

Producing a good quality car is one objective, getting it sold is another one. There
are three levels concerning a productA product consists of three levels, namely,
core product benefits, product attributes and support services 26. Product benefits
consider the very basics of a product, in the Case of BMW you would consider the
rational aspects that they produce cars, which have up to date technology, the
whose performances will be good and the fact that these products will transport a
person to a specific destination.

The second level considers the product attributes, referring to what makes athis
car a BMW car. When the customer is interested in purchasing a BMW, they will
take into consideration aspects such as the image of the firm (brand name), the
quality of the car, the design, price and size.

The third level is support services. These services would include guarantees,
after sales services and spare parts. BMW tries to maintain their market share by
providing excellent service after a customer purchases a car, promising a
customer pleasure when driving a new BMW. They offer a mobile service,
providing assistance when for example the car refuses to starttechnical issues
emerge27. Today, the support services are even extending to it is even going to
the extent that a BMW car will recognizinge that it needsa need for
maintenance,, then and subsequently will contacting the garage about possible
malfunctions, after which the garage will contact the owner of the car for an
appointment28.
20
Principles of Marketing, Kotler, 67
21
IBID, Page. 70
22
IBID, Page. 71
23
IBID, Page. 74
24
IBID, Page. 83
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IBID, Page. 93
26
Essentials of Global Marketing, Svend Hollensen, page 302
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http://www.bmw.nl
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4.3 Market entry and distribution strategies
The Uppsala Internationalization Model29. This model comprises the following
stages:

Stage 1: Export activities are not regular

Stage 2: Export is done by independent representatives
Stage 3: There is the Establishment of a foreign sales Subsidiary
Stage 4: There is foreign production and manufacturing units

The Uppsala Internationalization model30 can be used to illustrate the

internationalization of BMW. The assumption can be made, that when BMW
started offcommenced with their production of cars that their focus would
primarily be on the German market, exporting a limited amount of cars, covering
stage one of the Uppsala model. Later, when BMW obtained greater market
stability, their products being exported through independent representatives (the
importers), Sstage two became and is likely to occur still is applicable in many
countries today, this is likely to have started off when BMW got greater market
stability, their products are being exported through independent representatives
(the importers).

BMW`s first international expansion was in 197331. Ever since then, BMW has
been Ccoveringed both stage three and four of the Uppsala model when a South
African Importer was close to bankruptcy. As Tthey were not willing to lose the
market in South Africa, therefore they decided to start manufacturing in that
region32. Now, Tthe production is located where the demand for the products is
highest. With the expansion to Ssouth Africa, BMW might not have chosen a
country which has a low psychic distance. HoweverNotwithstanding, they have
strategically managed to opportunize on this issue by splitting up their market ,
where in Germany cars are producedin German car production with the steering
wheel on the left and, in South African production, with oppositional direction. it
is located on the opposite side, enabling The latter one enables the production of
cars for the United Kingdom, Hong Kong, New Zealand, Japan, Australia,
Singapore and the Sub-Saharan Africa33. Today BMW also has plants located in
the United States, India, Austria and China34.

4.4 Promotion Strategies

BMW bases its promotion strategies on both its product’s features and its well-
known reputation. First of all, BMW has build up a well known reputation in over
more than 90 years of experience. Besides the excellent service, BMW is
applying the Green Marketing Strategy35, BMW is researching how they are able
to make their cars more fuel efficient36. They were awarded various prices, such
as the ‘World Green Car of the year’ in Great Britain37.

4.5 Pricing Strategies

BMW Falls under the Skimming Strategy, which means that the product has to be
29
Essentials of Global Marketing, Svend Hollensen, page 56
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IBID
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http://www.bmwgroup.com
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IBID
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Essentials of Global Marketing, Svend Hollensen, page 327
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http://www.bmw.de
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https://www.press.bmwgroup.com
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unique and some sectors within a specific market are willing to pay the high
prices for their products38. As mentioned before, the uniqueness of BMW is
involves the actual product (BMW Cars) including the increasingly more fuel
efficient cars and their special after sales services, making their product
appealing to the customer. Through calculations, it becomes clearComputing
devices clarify that, with the reduction of the taxes taken into consideration, that
the car prices seem not to vary fluctuate that much internationally., Wwhen the
taxes and tariffs are subtracted in Germany the 3 series 18i costs 23247 euro39,
while in the Netherlands the same itemit costs, 22968 euro40. Recognizing the
insignificant difference in price, it suggests that the BMW enhances Pprice
standardization41. This means that the car has its specific price when it rolls out
of the factory, while from then on the price will be affected by forces such as
taxes and tariffs. It is a low risk strategy.

5. Miscellaneous topics
This last chapter will highlight the miscellaneous topic of ethical issues concerned
with BMW.
Initially, relevant theories on this topic as well as target groups will be presented,
after which this analyzed group’s ethical spending possibilities in BMW products
and services will be examined, i.e. ethical features carried out by BMW.

5.1 Relevant ethical ‘theories’

Delivering satisfaction means both understanding and complying with the
marketplace and customer needs. When for delivering satisfaction ethical issues
are at stake, it is thus essential to realize an ethical delivery accordingly. There
is no true theory or model which describes certain means of achieving this, it is
only known for a fact that “today’s companies are being called upon to take
greater responsibility for the social and environmental impacts of their actions” 42.
These requirements are to some extent binding by legislation, while also readily
accepted for those enterprises searching profit by serving the best long-run
interests of their customers and communities. For some companies, practicing
‘caring capitalism’ means building corporate ethics and social responsibility into
their mission statements, challenging all employees to include concern for
individual and community welfare. Although BMW’s mission statement has not
been modernized, still aspiring “to be the most successful premium manufacturer
in the industry” 43 and hereby , which implyingies exclusion of social concern and
merely pursuing success and premiums, the MNE certainly has responded to this
renewed and very demanding movement., which will be further detailed later in
this chapter. The company stated as official goals to focus more on the
customer`s benefit, to make the employee feel more responsible, and especially
to focus on sustainability and solutions facing global warming and problematic
megacities. But the modification of ethics policy or added goals is not sufficient,
they have to be made reality. Consequently, it seems important for a company to
promote its compliance with the prescribed environmental regulations applicable
in its field of operations as well as implementing and promoting own responsible
specifications. BMW does this according to own saying by “far exceeding
legislative requirements”, but does a truly ethical car consumer for them exist
and comply with their intentions?

38
Essentials of Global Marketing, Svend Hollensen, page 334
39
http://www.bmw.de
40
http://www.bmw.nl
41
Essentials of Global Marketing, Svend Hollensen, page 339
42
Principles of Marketing, Kotler
43
www.bmweducation.co.uk
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5.2 Conscious consumers and how to handle them.
In this regard, it is interesting to question whether BMW’s target group is, in fact,
ethically conscious. According to their own research presented on
bmweducation.co.uk the “most interesting group for BMW on account of its social
status, are represented between 30 and 50. It, however, has not been proven
that this generation currently is more committed to ethical operations than any
other age group nor do we know much specifications about the average
conscious consumer in general. In fact, “in this postmodern world, there is no
foundational ethical direction”.44 “Individuals react to personal costs and rewards
(customized perceptions45) and ethical behavior may also be affected by
situational factors, i.e. specific to the product (price) or purchase environment”. 46
The thought that ethical efficiency may also be depending on the importance
attached to corporate social responsibility in each country of BMW operation is
refuted by the study Consumer Ethics Across Cultures. It states, among other
recent studies, that ethical beliefs are “not based on one’s socioeconomic
position in society, and that culture has less effect on perceptions of consumption
ethics than expected”47, although this is conflicting with Hollensen’s notion that
“business ethics are complex because value judgementsjudgments differ widely
among culturally diverse groups.”48
Consequently, it is hard to anticipate for a firm on these responses when there is
no truly uniform moral climate, although individuals might yet be more subject to
influences and at least a general concern for poor labor conditions, harm to the
environment and counterfeit products will apply.

One thing all BMW customers have in common, though, “ is their appreciation of
driving fun and sporty, yet elegantly designed cars”.49 Thus, what needs to be
taken into account is that the adjustments necessitated by the ethical movement
are not hampering this experience of fun nor its
design and elegance – instead enhancing its appreciation. More specifically,
customers of BMW’s 3 Series and 5 Series Touring models, which are
characterized by an active lifestyle with an exceptionally high interest in outdoor
activities, might be more susceptible to responsible consumption than other
target groups. Considering its predicted appreciation, these types of cars
specifically could be designed and labeled by marketers as ‘ethically sensible’.

5.3 Ethical features BMW provides yet

Environment
BMW Group fundamentally believes that sustainable mobility should support
quality of life and economic prosperity while, at the same time, minimizing any
potential damage to the environment. They far exceed legal requirements, such
as Block Exemption and New EU legislation on car CO2 emissions – the latter one
being managed by environmental management systems at plants to smoothly
adhere to the standards. What they have created in addition are initiatives called
“BMW Clean Energy”, “Road Safety” and “Efficient Dynamics”, all together
reducing fuel consumption and emissions, while simultaneously improving
performance. Besides this fuel efficiency and hydro engine solutions, BMW
further makes use of recycled material and has corruption-preventing policies. A
specific division, the Environmental affairs division of BMW Group, is appointed to
monitor and supervise all environmental issues. Large investments are made
annually. In Germany in 2006 alone, BMW invested around €20.7 million into

44
Gergen, 1991
45
Cherrier, Oct 2007
46
Consumer Ethics Across Cultures, Sep 2005
47
Consumer Ethics Across Cultures, Sep 2005
48
Essentials of global marketing, Hollensen
49
http://www.bmweducation.co.uk/coFacts/linkDocs/marketingProdPlacement.asp
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product related environmental protection.

Educative element
On their website, BMW has included programs not only engaging and informative,
but also accessible to everyone on a worldwide level. This initiative was
stimulated by their receipt of publication orders and educational enquiries. The
resulting learning centre is targeting different segments, for each establishing
segment-specific subprograms. For the youth segment alone they include
exciting activities, stories, puzzles and quizzes such as “Clean Energy” for 11-16
year olds, “Young academy” for 14-16 year olds, while 7-11 year olds can play
“Road Safety Activities” and “Clean Energy” for 11-16. All together, they make an
early green start by creating the possibility from child on to teach and learn in a
fun way how to keep safe on the street, make sensible choices about personal
safety, investigate the relationship between energy and the environment and
science and technology involved in the car industry.

Energy
As mentioned earlier, fuel efficiency and hydro engines are modeled with regard
to the energy preservation of the environment. Different programs have different
focuses, such as an “Intelligent Energy Management” across its model range in
the short-term, a “BMW Hybrid Drivetrain” in the medium-term, and “BMW
CleanEnergy”, run on both hydrogen and petrol and which emits solely water
vapour, in the long run.

Appeal
BMW implements various tactics to both enhance and keep up to date with the
current appeal and success factors of their performance. Since research shows
customers long to be treated with respect, not prompted by complaints, One
tactic contributing to this aspiration is that BMW made ethical training mandatory
for key personnel at BMW dealerships of North America Incorporated through a
Sales Certification Programs.51 New dealership employees are also required a
three day orientation program in this regard. Finally, customer surveys monitor if
customers indeed received the intended respectful and courteous treatment and
they rate the fulfillment of all commitments made. Another source of appeal is
BMW’s involvement in sustainability initiatives. Annually, a Sustainable Report, a
Sustainable Value Report and a Environmental Report are released so as to
enhance both transparency and credibility of their responsibility and
sustainability.

Conclusion
For almost a century since its inception, Bayerischen Motor Werke Group is striving from their
German Headquarters to become the most successful premium manufacturer in the industry
with its three brands BMW, Mini and Rolls Royce. Their divisional structure is a helpful tool in
fulfilling this objective by realizing an efficient manufacturing system, producing where
demand is highest and strictly separating its manufacturing of car series. Another success
ingredient is their target marketing by income, psychographic and benefit segmentation.
Focusing on the resulting niche market of upper- and upper middle class customers with
relatively high incomes enables them to monitor and adapt to this specific customer group’s
needs. In this way, BMW cars, where this report is explicitly focused upon, consists of different
series. , eEach series is specifically adapted to different target groups, who are interested in
famous cars (3 and 5 series), the premium approach (6 and 7 series) innovative and sportive
design in Z-series, or X3 or X5 SUV’s and the 1 series and MINI models for smaller and more
environmentally friendly cars.
A common aspect of all BMW customers, though, is their appreciation of driving fun and
sporty, yet elegantly designed cars. Thus, this issue needs to be standardized in all series of
BMW cars, while gaining economies of scale from this centralized approach. To another extent
50
http://www.bmweducation.co.uk/coFacts/default.asp?topicID=6
51
Automotive News
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BMW needs to comply with cultural aspects influencing the appeal and success of their
products, e.g. uniqueness of cars customized for the right handed markets, while adapting the
steering wheel system accordingly. With critics as well as opponents favoring respectively
market divergence and convergence, BMW attempts to balance the extent and benefits gained
fromof standardization and adaptation. As a result, they operate according to the notion of
"Think global, act local”.

ButHowever, BMW produces not just a series of cars for their niche market, it also provides
their customer with great quality, excellent after sales service and the highest possible fuel
efficiency. This fits with their product strategy of offering product benefits, attributes and
support services. Concerning their pricing strategy, BMW applies the so-called ‘sSkimming
sStrategy’, which means that the product has to be unique and some sectors within a specific
market are willing to pay the high prices for their products. International variance in prices is
minimized, enhancing transparency and consistency for the customer, while for BMW this
means a low risk strategy. Promotion strategies such as the Green Marketing Strategy are
subsequently practiced to visualize and promote the intendedtioned excellences devised by
their product and pricing strategies. However, the particular market niche chosen also makes
them vulnerable when the segmented group’s beneficial features are diminishing , e.g. in
times such as the financial crisis. Where the company’s performance in the last 5 years was
flourishing, with over 100 000 employees normally selling 1.5 million automobiles annually and
realizing a revenue of more than 53 million euro’s, the high prices of raw materials, the
recession of the US property market and the financial crisis in 2008 had a severe negative
impact on BMW’s performance. It was announced that instead of pursuing merely premiums,
they are now focusing to manage their costs and cash flow instead. The still to be published
annual report of 2009 has to prove their intended mission. Nevertheless, one could argue that
the current interwoveness connection of markets and resulting dominoes effect are to be
blamed, as BMW had created a great portfolio in diversifying risk, having importers in more
than 120 countries represent BMW, producing in 24 countries around the globe. Until 1973,
export activities had been irregular or achieved by independent representatives, covering the
first two stages of the Uppsala Internationalization Model for which market experience in low
physic distant countries is a denominator to further market commitment. Although
contradictory to the model, the expansion to South Africa strategically opened the market and
production for all right-handed cars. Today BMW also has plants located in the United States,
India, Austria and China. Despite their worldwide distribution of cars, BMW’s position within
these markets differ, presumably based on differences in established competitiveness and
brand images dominating each market.

Then againMost importantly, marketing is managing profitable customer relationships, for

which .i It is essential to realize an ethical delivery when market needs require to do soany
(ethical) delivery compatible with market needs. Concerning conscious consumers it is only
known that this group is growing, unrelated to socioeconomic positions or certain cultures.
Thus, for a marketer is it most important to promote its compliance with the prescribed
environmental regulations applicable in his field of operations as well as promoting own
responsible specifications. For BMW this includes an on-line educative element, short- to long-
term energy solutions and transparency in reports as well as monitoring of customer needs
and ethical customer handling. More specifically, their BMW’s 3 Series and 5 Series models,
appealing to customers with an active lifestyle, may explicitly be labeled and marketed as
conscious consumption. In the end, it seems a natural survival of the fittest – a retail evolution
– in which strong, ethical dealers will be able to stay in the automobile business, the unethical
will fall by the wayside. It thus is in every dealer's evolutionary self-interest to demand good,
ethical sales practices and customer relations enforced in the entire BMW operations to keep
capturing the created value in return. Despite the company’s success and current ethical
initiatives in this matter, the ethical enforcement in all the firm’s corners as well as a true
conscious image is not gained in one day. After all, it would also take an evolution to view the
car industry itself as a true responsible sector. But a prosperous start is a fact.

Bibliography:

17
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1. Kotler, Principles of Marketing 5e, [ISBN-13: 9780131968790] (E chapter 5)

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2. P. Kotler, V.Wong, J.Saunders, G. Armstrong (2005) Principles of

Marketing .Fourth European Edition

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http://www.bmweducation.co.uk/coFacts/view.asp?docID=71

http://www.bmweducation.co.uk/coFacts/view.asp?docID=75

http://www.bmweducation.co.uk/coFacts/linkDocs/marketingProdPlacement
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http://www.bmwgroup.com/bmwgroup_prod/e/nav/index.html?
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BMW EfficientDynamics a Story of Global Success,

18
 https://www.press.bmwgroup.com/pressclub/p/me/pressDetail.html?
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BMW History
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BMW 7 series

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ml
19
 Clean energy

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Eckhardt, Giana
Consumption, Markets & Culture; Sep2005, Vol. 8 Issue 3, p275-289, 15p,
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p321-335, 15p

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Automotive News; 11/18/96, Vol. 71 Issue 5687, p12, 1/4p, 1 Black and
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12.Harris, Donna Lawrence

Automotive News; 11/11/96, Vol. 71 Issue 5686, p6, 2p

13. Johnson, Richard, and Laura Clark Geist. "Lutz's credentials: The Ultimate
BMW Marketing Machine?." Automotive News 83.6373 (2009): 3-27.
Business Source Premier. EBSCO. Web. 13 Mar. 2010

14. Kurylko, Diana T. "BMW to pit 1 series against Accord, Camry with mid-
$20s price." Automotive News 78.6057 (2003): 25. Business Source
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15.VW, BMW change ethics codes in wake of scandal. Lewin, Tony Stein, Jason
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 16.Wernle, Bradford. "BMW, M-B will shake up key segment." Automotive
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Appendices
Appendix A

21
 Audi group (www.audi.com)

1. BMW

BMW Annual report 2008

2. BMW group:

22
BMW Annual report 2008

3. Deliveries of BMW Automobiles by model variant

BMW Annual report 2008

23