Market Segmentation of BMW

One of the world’s most recognizable and admired brands, BMW is a German manufacturer recognized for its top-notch automobiles and motorbikes. One of the “big three” German luxury automobile manufacturers (the other two being Mercedes and Audi), BMW has solid global demand from buyers, and parking a BMW in your driveway has come to represent prestige in many communities. We’ll examine the market segmentation for BMW today.

Let’s start by discussing BMW’s positioning approach.

But first, Instagram post!

When you thought BMW couldn’t possibly be any more divisive, here comes a genuinely divisive BMW.

The company advertises its new BMW as its ‘technological leader”. All right. But did it need to be a massive 2.5-ton SUV? Was a brand-new operating system that takes hours to learn essential? Most importantly, did it have to be this way? Three years ago, it originally surfaced as the next idea.

The car is much less obnoxious in person than the photographs would have you believe. It may be somewhat intriguing because it isn’t claiming to be that absurd thing, a sports SUV. The nose is undoubtedly the worst aspect, but an iX without the M-Sport package does not have those repulsive black trapezoids below the headlights. They are a component of a fictitious “aerodynamic pack” that does not affect reducing drag at all.

The wide wheelbase, flat floor, and long wheelbase add to the room – making the outside of it bulkier. This structure, like the i3 and i8, is entirely custom. A three-dimensional carbon fibre box construction serves as the cabin’s support. Aluminium is another material. 

However, the high-voltage electronics, battery, and motor designs are modular variations of those found in the iX3 and i4. Those electric-drive components are unsexy, obscure, and most of us have no idea how they operate. However, they are essential to how well an EV works, how easily it drives, and how quickly it recharges.

As a result, the tone and description of the message reflect BMW’s true personality. The examination of the article leads us to believe that the brand embodies the Outlaw archetype.

What characteristics best fit the Outlaw archetype?

Fundamental aspiration: redemption or a revolution that ushers in a change;

Tactic: estroy, disrupt, or surprise;

Trap: taking the wrong path might result in a violent existence;

Values: power-seeking, rebelling against the status system, and social isolation.

Below are the message levels for the Outlaw archetype:

Level 1: sense of helplessness;

Level 2: disregarding society norms and practices and identifying as an outcast;

Level 3: exhibiting ominous behaviour;

Level 4: becoming a rebel or a revolutionary.

The archetype of the Outlaw may produce a strong brand if:

• It offers products at fair to economic costs;

• The company routinely advertises hazardous and generally inferior products. Purchasing that kind of item typically represents a rebellion against societal conventions;

• The product either has a new and complex nature, or its intended use is to damage something;

• Customers and employees either feel cut off from society or agree with its tenets.

We will then talk about BMW’s business strategy.

The growth of the BMW Group’s lasting competitive advantage over its rivals results from its capacity to build high brand equity. Perceived quality, brand loyalty, brand awareness, and brand associations are the common elements of brand equity, according to Yoo, Donthu, and Lee (2000).

The target market for BMW may decide to buy a BMW, MINI, or Rolls Royce car due to perceived product excellence. Due to the general public’s use of BMW automobiles, brand awareness has become higher. When these clients are happy with the product, they can buy more cars from the same manufacturer. Strong brand associations make it feasible for most of its pleased consumers to remain brand loyal (Bennett and Rundel-Thiele 2005).

Despite maintaining low operational costs, BMW Group consistently charges a premium for its premium vehicles due to its differentiation strategy (Porter 1985, p. 14). Additionally, selling its luxury vehicles at a premium would allow BMW Group to maintain its name’s standing and brand equity (Anselmsson, Johansson and Persson 2007). Accordingly, the money saved from the material and operational costs will be invested in new technologies and utilized to expand the business further, allowing the company to retain its differentiating strategy.

The efficacy and efficiency of BMW Group’s official websites in conveying its most recent automotive models to its target consumers is another component that adds to its success (BMW Group, 2010). Due to the company’s success in enhancing its Search Engine Optimization (SEO), potential customers may quickly inquire about the most recent automobile models on the market (Enge et al. 2010, p. 2).

In addition to having a reputable corporate website, the firm enables its target customers to test drive their selected automobile models to persuade them to complete the deal as quickly as possible (BMW 2010).

In addition to consistently selling its luxury vehicles at a premium price, the BMW Group’s ability to maintain low operational costs is another crucial success element (Porter 1985, p. 14). Accordingly, the company’s efforts to reduce the actual cost of its operations and material costs by collaborating with its approved suppliers might safeguard the business’s status during times of global economic crisis.

The additional funds that the company will save through tight management control over the company’s finances will be helpful for ongoing business development and future technological investments, in addition to maintaining the company’s financial stability.

Finally, let’s look at BMW’s Marketing Mix.

Product:

BMW has long been at the top of its league in the automotive sector. It started in the early 1900s by producing motorcycles and aeroplane engines before switching to automobiles a few years later. Although BMW participates in several sports and events and other promotions, its selection of vehicles is the key to its success.

BMW vehicles are popular among many individuals, including lower-class buyers. Moreover, BMW’s current membership in the “Want sector” is no surprise. The wealthy PREFER this stuff. Each vehicle in the series—the 1, 3, 5, and 7-series and the X and other classes—drives differently and has distinctive qualities. On the internet and in the media, automobile aficionados frequently post reviews of these vehicles along with comments about how wonderful it is to drive a BMW.

Observing this automobile travelling at top speed on a highway is a pleasure. BMW initially produced simple models before moving on to complex engineering. Modern cars feature strong motors, extraordinary pickup, terrific speed, and a guarantee of dependability and safety. Over time, powerful marketing campaigns have helped BMW goods acquire an “Awe” factor. BMW is something you always look at closely. BMW Motorrad also prioritizes high-end items. However, BMW sells many more automobiles than bikes, so that is a difference.

The fact that BMW is essentially independent of other companies—VW and Mitsubishi/Chrysler, means that it can use the same function best suited for the task. As opposed to the other two German automakers, Audi and Mercedes, constrained to using elements from across the companies to save money. It appears to improve the company’s image in the eyes of the general public. It seems to be a rare instance when consumers expect to pay a little bit more for a product they believe to be of excellent quality.

Key Product Characteristics in the BMW Marketing Mix

• luxury sector;
• good-quality merchandise;
• outstanding brand pull;
• excellent service.

Place:

All roles at BMW, including mechanics and customer support agents, become held by highly skilled professionals. They all work diligently to uphold the company’s reputation and are punctual and professional. BMW has production plants spread across several nations.

The BMW production factories for series one, three, five, and seven are in Chennai, India. It debuted in March 2007. At maximum output, this factory can produce 11,000 units annually. Mumbai is the location of the spare parts facility, allowing for quick transportation of these replacement components.

BMW sells its cars through a “dealer-based” network. Because assigning a distributor requires a significant investment and showroom margins are low, BMW does not utilize vehicle distributors and instead hires showroom dealers directly. As a result, BMW has authorized dealerships where customers may purchase automobiles.

However, BMW does have distributors and stockists in critical places to deliver spare parts. You may find BMW stores in the most upscale areas of big cities. Even in Mumbai, there are only three to four BMW showrooms, not more. Because if it distributes its products too aggressively, BMW will lose some of its brand images.

Key Distribution Elements in BMW’s Marketing Mix.

• model for lean distribution;
• dealers and showrooms profit well;
• good spare component provision.

Promotion:

According to Forbes.com, BMW was the most respected corporation in the world in 2012. One criterion is people’s willingness to work for, recommend, and purchase from the firm. It’s interesting to note that perceptions about the firm and its actual products accounted for 60% and 40% of the responses. Marketers know it takes time to develop a favourable brand impression, and BMW experienced the same. BMW has been selling its products with the most incredible television commercials, print ads, outdoor ads, and internet ads.

The company is aware that its target customers are willing to pay a little extra for the quality they expect. They also anticipate exclusivity because the vehicle should not be available to the general public. Television advertisements are ‘attractive’ and seem to have a higher rate than automobile advertisements. TV encourages viewers to apply this logic to their products. BMW’s advertising emphasizes the car’s appearance as much as its technology and motor. BMW is also very concerned about customer happiness.

People generally equate cars with prosperity and those with the money to invest in luxury and quality rather than purchasing an ordinary vehicle. The company chose the West Indies cricket team captain, Darren Sammy, and legendary batsman Sachin Tendulkar to represent BMW as its brand ambassador.

Price:

BMW is a high-end auto and motorbike manufacturer because of its superior technology and prominent presence. Depending on the consumer’s choice, BMW automobile prices might vary significantly depending on the series, model, or accessories. What can be noted, however, is that BMW vehicles are not intended for everyone, as they are more expensive than other vehicles due to their image and technology, as well as more costly to maintain and repair.

In response to the competition, BMW also introduced affordable (by BMW standards) vehicles like the BMW X1. The Indian market is the primary target. BMW has hundreds of dealerships and showrooms worldwide, and it offers a variety of finance options and payment plans to assist individuals who desire to spread the cost.

We were able to examine BMW’s marketing segmentation thoroughly. We discover some background information on the business and its Outlaw Brand Archetype. Based on that, we developed fictitious clientele. We learned a lot about BMW’s marketing mix and how it influences its positioning strategy. Therefore, we can confidently say that BMW deserves to be as well-known and wealthy as it is.

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