IMPACT ON BRANDING AND SALES IN AUTOMOBILE INDUSTRY B.M.

ABSTRACT

The Automobile Industry is on a high rise. There are many opportunities in the sector, and especially in the emerging economies like China, India. It has become imperative for companies to have a unique plan on place to attract the potential customers, who are having a wide array of options to choose from. This research study is meant to understand effect of branding and promotional activities on one of the Auto sector giant, BMW.

This era is marked by cut throat competition, and branding has always been a prime factor from where not only you get business, but also you may end up paying to competitors due to bad decisions. A brand normally helps product of a company to stay different from other competing products available in the product. Brand has several dimensions like name, logo, image, slogan, picture or a combination of all these.

The term Brand Equity is often used by marketers in order to assess the perceived value of a Brand by customers. Brand creates an image in the mind of customers about the product, quality and the services of the company. Due to increase in Globalization, firms try to acquire model, which caters to the need of all countries across the Globe.

Contents ABSTRACT .................................................................................................................................... 2 CHAPTER 1- INTRODUCTION ................................................................................................... 5 1.1 BACKGROUND OF THE RESEARCH STUDY ............................................................. 13 1.2 Historical Background- Automobile Industry .................................................................... 15 1.3 MAJOR ELEMENTS OF THE AUTOMOBILE INDUSTRY ....................................... 209 1.4 A LOOK AT THE FUTURE OF THE INDUSTRY .......................................................... 20 1.5 AIM OF THE STUDY........................................................................................................ 21 1.6 OBJECTIVES OF RESEARCH ......................................................................................... 22 1.7 PURPOSE OF THE STUDY .............................................................................................. 22 1.8QUESTIONS THAT ARE BEING ANSWERED FROM THE RESEARCH ................... 22 CHAPTER 2- LITERATURE REVIEW ...................................................................................... 23 2.1 BRANDING AND PROMOTION INITIATIVES ............................................................ 23 2.2 Brand Management: ............................................................................................................ 24 2.3 Customer Relationship Management .................................................................................. 24 2.4 Management of Core Competency ..................................................................................... 28 2.5 Managing Innovation .......................................................................................................... 28 2.6 Quality Control Systems .................................................................................................... 28 2.7 BUSINESS-to-BUSINESS (B2B) STRATEGY: ............................................................... 28 2.8 TECHNIQUES OF SALES PROMOTION ........................Error! Bookmark not defined. 2.9 SALES PROMOTION........................................................................................................ 30 2.9.1 NEED FOR PRODUCT PROMOTION .......................................................................... 31 2.10 PROMOTIONAL STRATEGY........................................................................................ 32 2.11 BRANDING ..................................................................................................................... 32 2.12AIMING AT THE TARGET USER GROUP ................................................................... 32

2.12.1Affect of target market on branding of the product ........................................................ 32 2.12.2 Brand Strategy ............................................................................................................... 32 2.13FINDING THE OJECTIVES OF THE BRANDS ...........Error! Bookmark not defined.3 CHAPTER 3- RESEARCH METHODOLOGY .......................................................................... 36 3.1 Research Question .............................................................................................................. 36 3.2 QUANTITATIVE METHOD ............................................................................................. 37 3.3 QUALITATIVE METHODOLOGY.................................................................................. 37 3.4 SAMPLE ............................................................................................................................. 39 3.5 PURPOSE OF RESEARCH ............................................................................................... 38 3.6 EXPLORATORY RESEARCH ......................................................................................... 41 3.7 DESCRIPTIVE RESEARCH ............................................................................................. 41 3.8 QUALITATIVE RESEARCH APPROACH ..................................................................... 41 3.9 RESEARCH TOOLS .......................................................................................................... 42 3.10 DATA ASSESSMENT ..................................................................................................... 42 Chapter IV- DATA ASSESSMENT............................................................................................. 43 4.1 ANALYSIS ......................................................................................................................... 43 4.2 ASSESSMENT ................................................................................................................... 52 4.3 DEMOGRAPHIC RESPONSE .......................................................................................... 52 4.4 GENDER AND AGE OF RESPONDENTS ...................................................................... 53 4.5 DESIGNATION OF RESPONDENTS .............................................................................. 53 4.6 TRAINING AND DEVELOPMENT OF ASSOCIATES .................................................. 53 4.7 ASSESSMENT OF CHALLENGES .................................................................................. 53 CHAPTER V- SUMMARY, CONCLUSION AND RECOMMENDATIONS .......................... 54 5.1CURRENT SITUATION OF THE AUTOMOTIVE INDUSTRY ..................................... 54 5.2 RECOMMENDATIONS .................................................................................................... 55 4

5.3 RECOMMENDATIONS FOR FURTHER RESEARCH WORK ..................................... 56

REFERENCES ............................................................................................................................. 57 APPENDICES: ......................................................................................................................... 59 Questionnaire (Tick the suitable option)................................................................................... 61

CHAPTER 1- INTRODUCTION The Automobile Industry is on a Roller-Coaster ride with high growth rate; its looking as if different stakeholders of the industry like suppliers, manufacturers, retailers and others are mining gold (Erich, 2000). In Automobile Industry, firms promote their brands by following a number of methodologies.

If we talk about Automobile industry, there are number of methodologies used by firms to promote their brands. In branding department, the initiatives taken are the major attraction of marketing mix. The Automobile Industry is not something very different and follows a number of different channels of promotion like newspaper, television, Internet. Moreover, its mostly preferred to connect to the consumers by following below line methods. In this customer is approached on a more personal level. The activities that automobile industry is using these days are personal selling, placing in malls, direct contacting (Holt, DB, 2004). The Automobile Industry is on a high rise. There are many opportunities in the sector, and especially in the emerging economies like China, India. It has become imperative for companies to have a unique plan on place to attract the potential customers, who are having a wide array of options to choose from. This research study is meant to understand effect of branding and promotional activities on one of the Auto sector giant, BMW.

This era is marked by cut throat competition, and branding has always been a prime factor from where not only you get business, but also you may end up paying to competitors due to bad decisions. A brand normally helps product of a company to stay different from other competing products available in the product. Brand has several dimensions like name, logo, image, slogan, picture or a combination of all these. Due to increase in Globalization, firms try to acquire model called Global Branding Model, which cater to the need of all countries across the Globe and has a number of benefits.

Local Branding: Today most of the companies are doing local branding, as it helps the brands to project a consistent image across continents. Most of the companies having presence in many countries suffer from an image problem, as it fails to project same image all over the globe. In 6

one country the same brand is considered as style statement, while its considered as a traditional or historic brand in other country. Global branding: The global branding has many benefits, as it has to project the same image across all continents; it helps to reduce the cost for brand. The companies dont need to specifically think for different strategies for each country. So, it not only saves much cost spend on these things, but also saves energy and effort. (Olins, Wally, 2003) Reduce Cost: The cost incurred on branding activities must be taken into account. The brands go for a cost benefit analysis, by help of which they can invest right amount of money into the branding activities and company will not go out of its budget. Consumer interprets a brand on the basis of the perceptions made by the marketers over time. In The Brand Mindset, author Duane E. Knapp has defined a brand as the sum of all impressions received by the customers. A brand in general conveys following information to the customers: Attributes : Brands try to highlight the attributes of product and give information to existing customers and also helps to make new customers. Benefits: Its mandatory for a brand for being successful to transform attributes to emotional and functional benefits. Some of the attribute that define fashion, style and how modern a person are transformed into emotional benefit, whereas customer who is not ready to buy more clothes is transformed into functional benefits. Values: If we talk about any brand in World, most of them have something with which they can easily associate themselves. . Culture: Brands also represent a certain culture, which is normally projected to consumers by different modes of communication mediums. Personality: Brands communicate personality status, whether a brand cares for consumers family, status, and himself. User: Brands clearly try to define their user segment. Thus brands invest a lot proportion of their revenues in order to create an image in target customers mind.

Value and Significance of a brand: Firms always pay a due respect to Brand Value. Thus most of the companies spend most of their efforts in order to build brand. Even the company cant think of existence without brand name. Its evident that there would be no value of any product, if the brand name is removed fro m the products. Could you even imagine the position of some world famous products, without their brand name. However everything even the name remaining the same, they would look lifeless. Thus, its expected of a company that it exerts full control over its brands. Now, firms have come to understand that brands are something more than signs or symbols. They can even be defined as combination of companys promotional, marketing, distribution and service efforts that differentiates it from other competing brands. So, in order to make a brand, a marketer should decide what he wants to convey to the consumer in respect to brand. Brand Challenges: In olden days, companies sold their brands without branding, but, with a lot of players entering the market and increasing the competition, firms started focusing on branding their products. Branding however poses many challenges. A marketer trying to brand a product has to consider certain decisions. Some of these important decisions are To brand the product or not, and if it should be branded, whether it should be A licensed brand or a brand of manufacturer. More so ever, a decision must be taken whether the company should adopt a blanket family brand name or individual brand names. Some of the major decisions are at which time a company should try to go for line extensions? (Czerniawski et al, 1999) Brand Equity: Brand Equity can be defined as something attached to a brand like assets and liabilities that enhances or depreciates its value. Some of the factors that determine brand equity of a product or a service are quality, trademarks, patents, loyalty and perception. Companies usually try to leverage the equity of an established brand to enter other categories.

A study conducted to analyze the important factors that influence the most powerful brands in the world, revealed that developing and maintaining strong brand names has been the top most priority for most corporate across the world, since a well-established brand results in higher customer loyalty and improves the profitability and value of the firm. In the research, ten factors were identified that the worlds most popular brands share. They are discussed below: 8

1. The brand offers more than what customer expects: Customers normally buy branded goods, because they expect some tangible and intangible benefits in a branded product along with the product attributes that make a product desirable. A brand which exceeds this minimum expectation of the customers makes a powerful brand. 2. The brand stays associative: most of the brands associate themselves with some intangible benefits apart from the tangible factors one seeks from a brand. For instance, people look for associations, like who is using the brand, when they are using these brands i.e. on what occasions, what the brand personality is, and what type of relationship the brand is trying to develop with the target customers. 3. Customers Perception rules the pricing of brands: It must be understood before setting price of a product that it must be in accordance with the perceived value of a brand. Thus firms should try to opt a strategy that should precisely match customers expectations. 4. Right Positioning of the Brand: Its very necessary for any brand to stay in the mind of customers for a longer time. For this its necessary that a brand should be positioned well. The brands which are positioned well differentiate themselves from other brands and are always close to the customers. 5. The Brand maintains consistency: Consistency is one of the most important aspect brands are looking to attain. Most of the marketing efforts are viewed according to the needs of modern times and preferences. Industry has seen many examples when some brands failed as they lost the relevance in spite of large amount of marketing efforts. This not only badly affects the sales, but also the brand loses its consistency. 6. The portfolio of brands are well maintained: Sometimes companies develop and maintain several brands so as to gain a greater market share. These companies maintain their portfolio as brands in the most efficient way. They ensure that the brands do not overlap or leave strategic gaps that competitors can take advantage of in the market. 7. The firm utilizes all its marketing efforts: Brands make use of all their marketing efforts to develop their image in the consumers mind. The marketing activities directed at answering

questions such as why and how a product should be used, who should use it and when, enhance use of marketing efforts to build their brand equities. 8. What any brand stand for is known by the companies: The managers in a firm who build the brands have to clearly understand how the customers analyze a brand. This will help them to make effective decisions regarding the brands. If the managers are able to understand what customers like and dislike in their brands, it will become easier for them to develop suitable brand strategies. 9. The brands are supported by customers for longer duration: Companies should support their brands for longer period of time by educating customers about all their features and benefits. Building a brand takes time and a company cannot expect to reap the benefits immediately. A brand ensures long-term benefits. Thus a company should strive to support and build the brands sacrificing short-term benefits. This helps the firm enhance brand value to the maximum extent in the long run. As a result, the profitability of a firm improves. 10. Checking performance of brand on timely basis: Firms have to evaluate the performance the performance of their brands at frequent intervals to ensure that they are on the right track. Evaluating the brands with proper brand audits and analyzing all the brands attributes at regular intervals will help the company to build strong and sustainable brands. 1999) Brand Strategy Decisions: Every brand in world conveys some meaning and stand for something for its customers. A brand follows some steps in order to deliver this value to the customers. Some of these steps are companys commitment to make things better and improve quality over time. To check the availability of resources that ultimately help in order to build brand and accordingly allocate the budget for expenditure on sales promotion, marketing and branding. All of these are part of branding and in any case organization fails to follow such steps, brand becomes liability not an asset. The implications branding should concentrate to improve sales of company. Its a clear fact that each and every product in the market cannot be branded, so one of the important decisions is what product should be branded and what should not. Its evident that some products cannot be distinguished easily from the other in market and cannot be even assessed on the basis of quality. Some of these products are chemicals and pulses. These products do not a have specific feature that differentiate it from other product. Thus, one 10 (Czerniawski et al,

of the important decisions is whether we should brand a product or not. Some of the other decisions include to adopt a different brand name or to follow umbrella branding. If any company wishes to develop separate brands, then it should have to pour more money and efforts to do marketing, branding and sales promotion. But, on the other side it helps to develop product according to the specifications and as per the need of customers. (Dayal, S., Landesberg, H. & Zeisser, M., 2000)

Companies also adopt comprehensive family branding i.e. same brand name or part of the brand name for all the products. Line family branding is another branding strategy where a company brands only a particular product category. Brand licensing is also one of the strategies where some of the authorized producers use a companys brand name for their products for a licensing fee. New Developments in Brand Management: The way through which brands are managed has become more practical and has gone way further with a lot of improvement. undergone. Companies are using concepts like Semiotics. Semiotics is a science of signs. Companies try to associate their brands with sign systems that have historical and cultural significance to enter the comfort area in the peoples subconscious minds. When any company positions a brand, they normally try to evoke the emotions of targeted group by relating the product with some historical or cultural relevance. It normally makes people to start looking and thinking about the brand with great curiosity. It also ensures that brand do not lose its relevance, nor its shine. In fact, the brand should never bore targeted group and must conserve its fanciness for longer duration. Brands that are innovative will always stand out and shine like a pearl in the market. According to the traditional belief, bigger brands always perform better. But a study conducted by John Blasberg and Vijay Vishwanath came out with a different finding. A study of 524 brands in 100 consumer product categories, showed that 90 of them had an annual growth rate of nearly 10 percent which was more than three times the average growth rate. Of these 90 brands, the majority were smaller brands. The major factor differentiating the brands that had performed from those that had not was only constant innovation and advertising.

Brand Relaunch: When a company plans to launch a particular brand after a certain time gap, then its called brand relaunch. In brand relaunch, often firms look to take over or purchase some 11

products developed by other firms over time, and then relaunch that particular product with necessary modifications and slight change in specifications. Internal Branding: Brand Mantras are used in order to oversee the significance of internal branding, and its also used to make sure that organizational members are in coordination with the brand and what the brand stands for. Normally people working in the organization must be clear with the vision and mission of the organization, as it provides them the way to move ahead. It also helps the organizational members to get an idea about the companys culture, their ethics and the values they stand for. More about what the company stands in the eyes of customers. The stakeholders of the company are also responsible on a much bigger extent to control the branding and promotion efforts. Sometimes the internal structure of the organization also become very important, as more centralized and traditional structure may downgrade and slow the process of branding in a company. In more centralized structure, employees need to depend on the senior management for minute of the tasks, and the senior management is indulged with loads of work. In such an organizational structure, the senior management cannot work so efficiently as they have to look on each of the tasks. If the control to take decisions is diverted to the employees, then they can take minute decisions and they dont need to trouble the managements work to take decisions for them. Such an approach, in which organizational members are given more independence and freedom to take decisions is called decentralized and divisionalization strategy. It makes the employees more responsible about their work, and they feel more confident and feel the sense of proud about their work. Such a move not only brings more transparency in the system, but also makes the employees feel more responsible. They being near to the situation and take more practical decisions in comparison to the management, which is famous for taking impractical decisions which are generally based on the statistics and not on market situation. (Dayal, S., Landesberg, H. & Zeisser, M., 2000) The brands normally have a life cycle. Its the main objective of the management to take care of brand cycle, by devising branding and promotion strategies accordingly. The management takes care of the brand by taking some important decisions which work in order to relate the brand with changing times, and so that people can easily get connected with it. Thus, focus is to keep brand a known name, and marketing and promotion efforts work to keep the brand look young to the customers.

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Most of the companies implement such strategies through coordinating efforts in their various teams inside company and delegating task to these teams who look upon these specialized task, and work I in accordance with other teams so that the overall objective of the company is fulfilled within team. These work group or teams have a specific plan and they work according to that with specific time limits and price constraints which are always an important consideration while choosing any strategy. Even big companies like google give a lot of freedom to their employees to talk some important matters inside the company in informal groups and take the decisions. As they have also found that taking decisions in informal group is easy and the decisions taken are much more effective and have long lasting effect. Many companies these days are promoting such informal groups inside their company to encourage their employees to feel relaxed and take better decisions. Apart from this, it creates a very cordial relationship among the members of informal groups. They have a very good understanding among themselves and most of the members encourage and respect the opinions of others. Such informal groups may be the group with whom you take lunch, your break group, your friend circle or even your sports circle inside the company. It has been found that decisions taken in an informal organization spread among these groups at a rapid pace. Most of the people get informed very quickly, unlike formal groups in which management has to take a lot of efforts in order to give information to organizational members. In formal groups moreover employees depend on the management to take responsibility and put efforts to spread any information. The decisions taken in these formal groups are more time consuming and also they take more time in implementation. Any change in the decisions is passed through many channels to the senior management which considers the options available and then take the decisions accordingly. This is the only reason why companies are moving towards decentralized and divisionalized structures, and are proving a major key driver for companies to take proper decisions and that too within time. This structure is most popular in the multi national corporations which give more emphasis to freedom to participate in decision making.

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1.1 BACKGROUND OF THE RESEARCH STUDY

The change in the dynamics of Socio-Economic that took place in Europe in past decades have contributed a lot in giving a shape to the success of the Automotive Industry. Thus, the revolutions that broke out at that time are still continued, and are felt by the industry even now in form of advancements year on year. This revolution started way back during Second World War, which helped in uniting the divided automobile industry. Its not a hidden fact that the after effects of Second World War were very disastrous and the world economy suffered a lot. But its a fact that strong performance of Automobile Industry was one of the major reasons for immediate recovery of badly struck world economy. Some other factors which were imperative for growth and expansion of the industry were presence of quality roads and nice infrastructure. All of these factors helped the Automobile Industry to grow exponentially after the Second World War. This was supported by the huge volume of sales in the Automobile Industry (David, 2001). The Auto motive Industry has several processes like procuring raw material, product design, development of prototype, producing actual product, product selling and finally after sales service. There is a noticeable shift in the paradigm of Global Economy, where emerging economies such as China, India and Brazil are proving to be major drivers of growth. There is an increasing demand of different parts from Automobile Industry in these Countries. These thriving economies have an ever increasing potential for two wheelers and four wheelers. The growth rate of China has attracted the focus of every company towards its lucrative and expanding market. The presence of a large number of potential buyers in China has made it one of the most preferred of all the options available for Automobile Industry. In Global context, the market of United Kingdom is increasing at fast pace, therefore Automobile Industry is one amongst the major drivers of the United Kingdoms Economy. A major chunk of population gets employment only from Automobile Industry in UK, which according to facts is approximately slightly above 0.5 million. The Automotive Sector is growing smartly over various dimensions in UK too (Bridson, 2004).

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Its clear from graph given above that the labor productivity/head of Automotive Sector in UK, for few years is on rise. This success can be attributed to initiatives taken by firms in the field of sales and marketing, due to which a huge volume of automobiles are sold in UK and the number is still rising consistently.

Figure 2

(Global Auto Research, 2010)

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1.2 Historical Background- Automobile Industry

For decades countries like US, Germany, China, South Korea and Japan have been the leaders in Automobile Industry. US had been undoubted leader in terms of consumption, and approximately more than six and a half million people are employed in Automobile Industry. The Automobile Industry alone contributes a prolific ten percent in the overall GDP of US.

MAJOR COMPANIES IN THE AUTOMOBILE SECTOR A major portion of Automobile Sector is dominated by some leading Automobile Giants. In order to reduce costs and attain economies of scale, all of these have opened their manufacturing and assembling facilities in developing nations where labor is cheap. Some of these nations are China, India, Brazil, Africa, etc. Presence of manufacturing and assembling facilities in such nations would help to make its distribution network more efficient and reduce overall costs due to cheap labor cost and increase profit margin. Toyota As per production, the Japanese Automobile giant Toyota is the leading automobile company across the globe. Its spread at different places in the World and provides employment to more than 300000 employees. It has total assets worth 100 billion USD and total revenue of Toyota is approximately above than 200 bn USD. General Motors General Motors, the US based automobile major has offices at Michigan, Detroit. As per the production, General Motors is ranked at third position. General Motors has a respectable status and enjoys being a part of Fortune 500 companies of the world. General Motors is present in 150 countries and has production bases in more than thirty nations. Ford Motors The contribution of Ford Motor in shaping the automobile industry is really marvelous. It was founded by great leader and innovator Mr. Henry Ford, a very respectable figure and is credited as pioneer of the innovation in the automobile industry. The first car of Ford was launched by

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Mr. Henry Ford. The automobile giant has a number of brands under its roof, namely Volvo, Mazda of Japan, and Aston Martin of UK. Volkswagen AG The German automobile giant was started in the year 1937. Volkswagen has a number of brands under its kit, namely Bugatti, Lamborghini, Bentley, Skoda and Audi. It uses the brand name Scania for operating other category of products (Paul, 2006). Daimler Earlier called as Daimler Chrysler, Daimler today is amongst the league of world known automobile brands. The headquarters are located in Germany. Its one amongst the leading manufacturers of the truck in world. Till then Daimler has entered into many diversified sectors , financial sector also, where it functions by DFSA, Daimlers Financial Service Arm. Firm has grossed a whooping amount which is approximately more than 90 billion Euros. Maruti Suzuki Maruti Suzuki was started as a joint venture between Maruti of India and Japanese automobile company Suzuki. Its a listed company on Bombay Stock Exchange. Its one amongst leading company operating in the South East Asian Region. According to the facts, the revenue generated by Maruti Suzuki in 2009 is estimated close to 5 billion USD. Maruti Suzuki at present is source of employment for more than six thousand people in India for its operation. All of these automobile biggies play a major role in the way industry is progressing. These players lead in the global production and sales and govern the market in different continents. The figure given below mentions the position of Automotive Sector in fiscal year 2004-2005. It states the share enjoyed by different countries in the production of automobiles. The contribution of Europe leads with highest percentage, and is approx above one-fourth of the total production (Aaker, 2004).

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Figure 3

(World Automobile Production in 2004)

The data given below presents the overview of Automobile Industry for the year 2008, and the following year. Its obvious from facts presented here that General Motors is leader, however Toyota has taken over General Motors as per the recent data.

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Figure-4

(plunkettresearch.com)

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1.3 MAJOR ELEMENTS OF THE AUTOMOBILE INDUSTRY

The spare parts used in the automobiles carry a major portion of demand. There are a wide variety of spare parts that are used in the automobiles ranging from electrical parts used in automobiles to steering. Its a fact that spare parts are used for many purposes. The spare parts have an overall share of thirty percent in the industry. A major portion of this is ruled by electrical parts used in the automobile industry. The steering used in automobiles commands around 20 percent of demand in the industry.

FACTORS THAT PUSH FORWARD THE AUTOMOBILE SECTOR There are several growth parameters in the automotive sector. There are many first of its own kind in the automobiles sector which are stated below: Every industry is related to one or the other industry in any manner. There are number of industries that depend on a major extent on the automobile industry. The products manufactured by these industries are consumed wholly or partly, either directly or indirectly to fit in the automobiles or providing facility. Some of the industries that are majorly affected are paint industry, rubber, steel, aluminum, petroleum and glass. The automobile industry has always proven to be a growth generating sector. It has an unprecedenting capability to take out as many investments from foreign countries as possible. This is the only reason why its growing at a much rapid speed. The automobile industry has been a fore runner in the growth of technology and use of new technologies for operations. The automobile industry every year invests a large amount of money in Research and Development, which benefits the companies to come out with a meaningful product and gives an edge over its competitors. The world is witnessing a change in the dynamics of economy across the globe. Due to increase in the income levels of people living in developing nations like India and china, there is a huge demand of low cost two-wheelers and four-wheelers. The automobile sector proves to be a major employer for countries. According to recent facts, the industry is employing 19 mn employers across the globe.

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Like other industries, automobile industry also depends on other industries for growth. Some sectors such as infrastructure, roads being one of the major concern. The availability of easy finance for purchasing, price of diesel and petrol, also are one of the major concerns (Holt, DB 2004).

1.4 A LOOK AT THE FUTURE OF THE INDUSTRY

These days, automobile industry is seeing a change in dynamics, with South East Asian Markets emerging as one of the growth avenue. The automobile industry is slowly and steadily shifting from developed nations to developing nations. Thus countries like Indonesia, Thailand, Malaysia are proving and emerging as a great market for the automobile industry. Some of these countries have a huge demand for low cost two-wheelers and four-wheelers. The growth in Thailand, Malaysia and Indonesia may be attributed to their trade policies that help in order to reduce export rates. These trade policies are governed by ASEAN free trade policies and it governs the amount of trade with neighboring countries (Neil, 2000).

The automotive industry contributes on a greater extent to the economics of the World. The automotive sector has capability to contribute a larger amount for GDP of any country. The statements are backed by the fact that- The total worth of assets of top ten automobile companies in the World is equal to the worth of assets of top fifty companies in the World. Such fact provides a better understanding and shows a clear picture about the automobile industry on a whole. There are number of factors that govern rate of growth in the auto motive industry: In automotive sector, the sale of the automotive products is affected by the rate of petroleum products. Around the World, the changes in the way people commute from one place to the other majorly affect by the automotive products sold across the world. The fortune of top Automobile companies, depend on a larger extent on the growth rate of the developing nations such as Brazil, India, and China. Some other aspects that contribute to the change in the auto motive industry are:

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The industries these days are putting a lot of efforts in order to reduce the environmental pollution by reducing the amount of carbon emissions. The companies invest a lot of money in R & D to devise such methods. As a result, there is a constant reduction in the amount of harmful gases emitted in the environment.

Developing the world class standards for emission of gases. The rate at which personal car segment is growing is equal to the rate at which heavy automobiles in the world are growing. The large amount of automobiles in world has led to the problems like network congestion, and time taken by people to reach from one part to other in immensely populated areas of the world.

The emergence of internet and its increasing usage for shopping of products has also revolutionized the way auto motive industry operate. The internet is not just used for buying and selling of the spare parts, but also used for buying and selling of the vehicles also.

In earlier times, the automotive sector was ruled by German car manufacturers and American car manufacturers. But now, there is a shift with Asian car manufacturers like Toyota and Honda, being the new entrants are going to compete with these American and German Car giants. Its a fact that Toyota and Honda have taken the position of leader, the position which was once ruled by Ford and General Motors. The major automobile giants have already set or planning to open their manufacturing facilities in the South Asian markets. It not only reduces the cost, because of cheap labor, lower financial rates (Erich, 2000). As per the estimates, the automotive industry of World would reach a level of 1.9 trillion USD. There is a high probability that industry would advance at a higher rate close to forty percent/ year.

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1.5 AIM OF THE STUDY

The main aim of carrying out this research is to collect data, study and then analyze that data. To find out the effect of branding and promotional strategies used by BMW and on its sales.

1.6 OBJECTIVES OF RESEARCH

To carry out a research, in order to find out the correct processes used for branding of the spare parts of BMW

To understand the effects of branding at the overall sales of BMW. To find the ways in which BMW does branding of its products.

1.7 PURPOSE OF THE STUDY

Every research has to find out answer of some questions. There may be many reasons for conducting research at the first place. The actual reason of conducting such research is to answer questions like finding the true potential of branding on the offerings of company. The other questions that need to be answered are to understand the strategies used in the automobile industry in accordance to branding of the product. These things help a lot in order to increase the profit levels as well as profit margins (Bridson, 2004).

The analysis of methods and strategies of branding would prove helpful for the companies, as there is a direct correlation between branding efforts of company and methodologies which are used to increase the sales. A company should follow right practices, and hence the sales of the companies start to rise and transform into results in the form of profits collected by company. 1.8 QUESTIONS THAT ARE BEING ANSWERED FROM THE RESEARCH There are number of problems, for which we have to find the solutions by help of research carried out. List of such problems is stated below:

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1. Most of the companies in the automobile industry, specifically BMW invest a large proportion of their revenue in branding and promotional activities? 2. What are effects of having planned and effective strategies on the branding and promotions, in reference to BMW? 3. Specify that BMW is following what type of promotion and branding strategies? In this research, the focus is to give solutions for problems related to analyzing primary data and secondary data collected. The data collected and information gathered from several sources is analyzed in order to find solution of certain questions.

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CHAPTER 2- LITERATURE REVIEW

In the case related to the automobile industry, the prime concern is to assess the earlier researches carried out, and how the value can be added by understanding the problems involved or limitations in the research. Thus, the first step is to assess the sales promotion strategies by taking care of automotive industry.

Today brand communication is one of the major aspects, and automobile industry pays much greater concern to enhance sales by communicating their brand to the customers. Thus making a brand famous and letting others know about product and offerings is a major factor in automobile industry. Around 75% of money is invested by companies to communicate this message to the customers. This planning to invest a particular amount of money is done during budget allocations. Manufacturers encourage their marketing and branding team to create an image, a quality, style and personality amongst customers that influence customers to make a purchase (Kotler, Gary Armstrong, Veronica Wong, John Saunders: 2008).

The sales promotion strategies followed by companies such as offering coupons for purchasing or discounts, discounts on price and attaching gifts with product. The companies try to make customers aware of these offerings by help of different medium of communication like advertisements, billboards, signboards, internet, etc. This helps the customers and if they like the offering, they consider it as a value for deal offer. This is just like adding something extra to the offered product to the customers. This has no effect on quality, neither on quantity, but only focus is to increase sales (Kotler,Gary Armstrong, Veronica Wong, John Saunders: 2008).

Entering into dirty price wars and bad tricks to attract customers like negative publicity of competitors can be avoided in a much bigger fashion by offering value added products to the customers. Devising such offers and implementing them is an art. Its a fact that crafting a nice offer does not ensure increase in sales volume. Thus until and unless, the offer is not implemented well, nobody can guarantee its success. The only key is that companies should keep on devising strategies and try to find one which really works for them. This will help firms to avoid the price wars and getting above fights for market share. The only objective of firms 25

should be to serve the offers in a well manner to the customers to get maximum benefit out of it (Kotler, Gary Armstrong, Veronica Wong, John Saunders: 2008). (Alvarez, Casielles: 2005), Its a proven fact that giving offers to customers when they do not expect it at all, makes the offer more effective, and marketers do not need to worry about sales promotion and doing lot efforts to boost sales. If the offers are obvious and people already know that such offer may come during the time, it does not excite them much. Such an offer does very less to enhance sales. Thus, when and what should be offered must be clear in the minds of marketers, only then they would become successful to achieve the target (Ludlow, 2002). 2.1 BRANDING AND PROMOTION INITIATIVES

The increasing use of technology in the Automobile Industry by major players at various locations throughout the world has increased the competition to a large extent. Thus customer is posed to a wide array of options to choose from. The Automobile players such as Mercedes, Porsche, Audi operate in the same premium segment in which BMW operates.

Thus any aspect that gives a competitive edge to any player over others become of prime importance. Industry has understood the importance of branding and promotional activities, hence firms are paying more attention to these aspects. A number of brands competing in the segment pay a more attention to create a strong brand name, and follow correct targeting and positioning mechanisms, so that they can attract customers in more efficient manner. The presence of World Wide Web has opened a new era for branding and promotional activities, by help of which a very strong and clear message can be send to the target customers. Firms try to stimulate demand for short term by offering discount, which lures customer to make a purchase instantly. The prominence of internet cannot be underestimated in todays era as its proving one of the strongest communication media, and companies can run a variety of promotional activities for the product they want to sell. Its a known fact that every automobile company is carrying one or the other promotional campaign to stimulate demand through internet and increase the visibility of the product in the eyes of customer. The other major factor present in the markets is the 26

availability of several financing options in the form of automobile loans. Its imperative for the success of automobile industry to have good finance options at place, as majority of people prefer to purchase car on loans (Holt, 2004).

The branding of a company may play a decisive role in obtaining a competitive edge, and helps in boosting sales that continues for long period. The branding is a concept that helps a company to project the right image to its targeted segment. Thus branding initiatives help companies to reach the targeted customers in the manner they want. Its imperative to have a strong brand image amongst customers, as it provides a foundation for launch of new brands by company, and hence boost sales and improve profits. A strong brand image of a company makes customer more loyal, as they can easily relate with the brand. If branding and promotions are carried effectively, brand easily occupies a unique image in the mind of future prospects. 2.2 Brand Management:

BMW is very particular that the brand management function should be carried in a professional manner. The brand management helps to project correct image of the brand in the mind of the customers. Its responsibility of senior management to make sure that the customers get a consistent amount of exposure from several communication mediums to strengthen the image of brand. 2.3 Customer Relationship Management

The role of customer relationship management in the automobile sector is of significant importance. Its the duty of Customer relationship manager to fulfill the emerging needs of customers within time. This can be done by following a proper communication medium through which information can be exchanged amongst several entities. The role of after sales service is also very important in automobile industry and it can be improved further by following CRM.

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2.4 Management of Core Competency The companies have come to know that in this competitive world, its necessary to have a competitive advantage and have core competency. Developing such core competencies will ensure huge amount of profits for longer time. Its necessary on part of company to carry a detailed survey about its practices and understand its strengths and weaknesses, and hence develop core competency. 2.5 Managing Innovation

Innovation is a key to stay above competition. If the company is high on innovation, then it can easily survive during tough competitive time in the industry. The innovation factor is cashed by companies when their products stand apart from competing products. The customers not only appreciate the product, but also company gets result in the form of high sales figure. 2.6 Quality Control Systems

The automobile industry has a number of players, hence it becomes very important for companies to have standardized spare parts and other entities (Andrew, 1991). 2.7 BUSINESS-to-BUSINESS (B2B) STRATEGY: Any brand in world wishes to win the confidence of customer, and they remain loyal towards the brand. This enforces brands to design business tactics which are in favor of customers and they enjoy their support for longer run. A loyal customer is just like an asset of a company and help brand managers to finally reach the right product line (Adcock, Dennis, Al Halborg, Caroline Ross: 2001). Its the responsibility of marketing managers to handle industrial marketing activities, and devised strategy to attract targeted group. The marketing managers devised strategies that help to carry promotions smoothly, while keeping an eye on feasibility and effectiveness of the process. Finding out solution for the queries and taking the right decision at right time is one of the most important step in the formation of strategy. Some of the queries in the mind of consumers which 28

need to be addressed is actually what consumer need from the product, or aspects that influence buying behavior (Adcock, Dennis, Al Halborg, Caroline Ross: 2001). Apart from finding out questions to several questions, one significant step is to analyze the target segment carefully. This helps to identify the market for the products and accordingly devise strategies to target that market. Then some tactics are picked up from a number of options to boost the sales as per requirement. These have a direct impact on revenue generated and hence help to improve margins (Miller & Muir, 2004). More data and analysis is needed for deep study must be carried out before selecting any promotional activity in order to increase sales from Industrial Marketing perspective. A number of strategies are kept in mind and in the meantime the technique which is suitable opted, is tailor-made according to the need of target segment (Kotler, Gary Armstrong, Veronica Wong, John Saunders: 2008). A proper sales promotion technique helps to increase sales to a certain level, attaining a height, surpass the targets by a decent margin. In the premium segment where BMW operates, there are no price wars, as they compete on the quality rather than the price. Due to this the profit generated is entirely related to the volume of cars sold. This is the only reason why promotional activities are carried on an aggressive note as they directly affect revenues and enhance profit margins (Dev, Chekitan S, Don E. Schultz: 2005). A deep study must be done before selecting any promotional activity in order to increase sales from Industrial Marketing perspective. A number of strategies are considered and in the meantime the most befitting technique is opted, and is customized as per the needs of target segment (Kotler, and Pfoertsch, Waldemar: 2006). Of the several techniques, one which can be considered are discussed below -

Media: In this competitive world, every company is bound to take the help of media for carrying promotions and stand above the competition in the market. The strong presence through media helps in order to have a strong brand recall amongst customers. Most of the companies want to make a strong presence amongst youth as they are the ones who majority of time on internet, thus internet proves to be very helpful medium in reaching out to this young population. Thus companies are fighting on internet how they can come close to the youngsters and turn them into loyal customers through promotional campaigns (David, 2000).

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Customer Offer: one very important step is to actually identify and border the target segment. Among the plethora of tactics to promote sales can be employed either by picking directly from the sources or customizing them according to the requirement. These promotional activities tend to have impact on revenue generated and enhancing the margins. Customer relationship management must be in place for catering to every need of the customers and more likely make them loyal customers of the company. One way can be giving special treatment to the privileged customer of the firm. (Dev, Chekitan S, Don E. Schultz: 2005)

Web Promotion: Most of the youngsters use internet, so it becomes imperative for companies to devise strategies that help them to get close to customers. The companies make their websites and try to make them customer friendly. They also try to include some services that can attract customers. These websites also update customers about the latest trends in the market and especially the product (Miller & Muir, 2004).

Discounted Prices: This is one of the strategy followed by many companies. Companies identify the season in which their sales are not high and hence come up with discount offers and attractive prices to lure customers to make purchase in the off season. Thus companies maintain their sales throughout the year by offering discounts. It also helps company to reduce costs on keeping huge amount inventory. In this way, discount offers may prove to be smart option for sales promotion (Miller & Muir, 2004).

Finance Deals: Sometimes you wonder what stops people to buy some very good quality products instantly? Well the answer to this question is the lack of ready finance at hand. In this competitive world, if any company provides attractive deals on financing the services, then it can definitely come up as a major benefit for the company. Some of the options like flexible financing may also help customers to select the best deal of the options available to them (Miller & Muir, 2004).

Trade Sales Promotion: The retailers are normally the people who directly face customers. So, if the company is targeting high end sales then it can motivate the retailers to increase the sales volume and hence enhance the targets. For this companies try to come up with very good and 30

attractive schemes for retailers like monetary gifts, holiday packages, tours, etc. Some of the methods used under this are:

Trade Allowances: The trade allowances are normally given to retailers that maintain a well calculated amount of inventory, and do not go out of the stock at the time of peak demand, due to lack of supply. Its a reward to distributors for saving the huge loss of the company in the form of customer loss (Miller & Muir, 2004).

Dealer Loader: This technique is used by companies to motivate dealers to purchase more vehicles from company and participate in all promotional activities carried by company and push these products towards customers so that they can buy more. The companies accordingly provide handsome incentives to the dealer for their efforts. Such acts on the part of company keep the motivational level among the dealers and hence prove beneficial.

Trade Contest: In automobile industry, companies give reward to their dealers for successful completion of task. Most often its done by giving rewards to dealers with highest sales in a month or a period. These not only create an atmosphere of competition amongst dealers, but also increase the overall sales of the company (Joshi, Rakesh Mohan: 2005). Training Programs: Dealers act as an intermediate between customers and company. So, its necessary that they must be aware of the values of the company and must be trained in a proper fashion so that they can easily achieve targets set by company. One of the important aspects of training programs is to develop a sense of understanding about companys policy and vision (Kotler, 2006). 2.9 SALES PROMOTION 2.9.1 NEED FOR PRODUCT PROMOTION: In this competitive world where many brands are competing to attract the eyeballs, it becomes important for every company to go for product promotion. Some of the reasons for product promotion are: Promotion is very important for every industry because with the help of these 31

activities product gain its recognition in the mind of the consumers. In this competitive era these activities gained top most priority. Necessity for promotion attains its peak when: 1) when an automobile major is going to launch a new car in a selected segment. 2) To attract new customers and keeping them aware of the new offers. 3) When company want to attain a particular brand image and increase sales volume. 4) To remain competitive in the market and creating a competitive edge over others. 5) To keep distributors updated and aware of the new offerings (Joshi, Rakesh Mohan: 2005). 2.9.2 EFFECTS OF PROMOTION: According to the present situation, we cannot underestimate the importance of promotional activities. There must be a proper promotional plan at place. Some automobile giants like Toyota, BMW, Volkswagen, Daimler, Nissan, Honda, GM have almost same target segment, where competition is really tough. In order to outperform competition and stay above others its really necessary that firm should have a promotional plan and marketing department should work hard to implement them successfully. Today customers are well aware and want to assess all the options in the market before purchasing a product. Thus promotional campaign works in order to present product in the right manner in front of target segment, so that it always remain at the top of the mind of customers. The promotional campaigns also try to assure customers that they are getting value for money and had all the desired features. The promotional mix of company tries to increase sales which directly result in increase in the revenue of the company. (Joshi, Rakesh Mohan: 2005). 2.10 PROMOTIONAL STRATEGY 1. DECIDING THE RIGHT PROMOTIONAL MIX: While formulating the right promotional strategies many things should be taken into consideration like 4Ps of promotional mix. So it is first responsibility of the company to designed effective promotional strategies so that there should not be any deviation and purpose of these activities should be fulfilled for which segment it is designed. An effective promotional 32

strategy is one which helps in generating revenue, increases its sales and helps in reduction of cost. Company need to do continuous record that how much they have spent and how much revenue they have generated. They can do this analysis by calculating ratios. Many factors that should be taken into account those are: Nature of Automotives should be taken into consideration. There are certain groups of customers, if the strategy is not planned well according to the needs of the customer, then its evident that company would lose out to its competitors. So, marketing department should work hard to devise strategy that concentrates more on different product and their segments. (Joshi, Rakesh Mohan: 2005). Nature of Customer is an aspect significant for the company to understand. The companies put a lot effort in order to understand demographic, political, economic and social parameters which play a significant role in devising strategy (Joshi, Rakesh Mohan: 2005). Nature of Market is one important factor which must be considered while devising any strategy. The major decisions are whether the strategy should be made specifically for niche market, or for masses (Bridson, 2004). Availability of Funds is an aspect which is of prime importance for every company, as they have to select a promotional mix that reaches to maximum customers with minimum costs incurred. Inflow and outflow of money can be tracked by auditing only. (Joshi, Rakesh Mohan, 2005).

2.11 BRANDING: As mentioned earlier, brand is the name, sign or symbol that is designed to differentiate one organizations offerings from others. This will enable the organization to attain sustainable competitive advantage over competitors. Its because of this fact that branding becomes a parameter of high strategic importance. In todays competitive world, strategic brand management includes of carving and sustaining high margins of brand equity in relatively measurable terms (Gregory, James: 2003). Currently, it is needful to differentiate your product from other products.

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It is an important tool for the companies not only to differentiate its product but also to create positive image and tend customer to purchase their product. And the most important thing is to cater which will satisfy them. All product offered by the company should be branded and utilize proper methods of segmentation, targeting and positioning (David, 2001). Its brand value that helps the capture the market which they are targeting & helps in collecting premium. If all the marketing activities are carried in a desired manner it will result in increase the profitability of the company. Main of effective management of brands are:1. Messages should reach to the target consumer in the right manner at the right time. 2. To maintain high level of credibility in the market. 3. To emotionally connect target prospects with the brand. 4. To achieve a high level of customer loyalty. 5. To motivating the target segment to buy the product. Its necessary to understand the fact that success of branding to a greater extent depends on the needs of the intended customers. Source: (darkmattermatters.files.wordpress.com) It can be concluded that brand is all about how your customer perceives your product. ( Joshi, Rakesh Mohan: 2005). 2.12AIMING AT THE TARGET USER GROUP: If company understand that to whom they want to target their product that to be produced by them than they will be able to cater that market with augumented product that will satisfy their customer. In case they have selected wrong target market that they should reconsider their strategy. They must understand its boundaries, identify and then mention target customers which its targeting (Aaker, 2004).

2.12.1 Branding activities must affect the targeted market during promotion so that it generate AIDA(attention, interest, desire and action) in the customers who want to use the product or the service offered by the company. Companies aim to achive its goal. Accurate assessment of the 34

market should be carried out by officials of the company, and then only they can come out with an accurate goal. If the marketer is aware of the target customers, then proper step is to formulate effective strategie that connect to targeted market. Targeting segmented market goes a long way in thriving the brand image of the company as the only focus then is to target them (Kotler, Philip and Pfoertsch, Waldemar :2006).

2.12.2 Brand Strategy: Brand strategy is applies to product & service which is offered by the company for customer whom they want to serve. Marketing department must understand entire process of branding carried out by the company. There are a number of barriers that restrict companies in successfully branding a product or a service, and its essential that marketer should have a complete knowledge of these barriers. Such hindrances should be tackled properly, so that organization progress in the accurate path (Miller & Muir: 2004). In branding and promotion activity of the company there are different types of hindrances these are as: Financial constraints limit companies to invest more amount of money into the sales, marketing, promotional activities, etc. Location: The preference and taste of the customers change according to the location. Thus customers at one place might prefer one product over other, while customers at some other location might prefer some other product. Thus location is one of the most important considerations while formulating the brand strategy. Timing: For formulating brand strategy product and services of the industry plays a crucial role. In performance of industry, the strategies may have longer effect on the company if product was not launched at right time. Competition: Todays era is competitive era in which many companies are competing on this arena because of this competitive environment effect the branding strategies. If competitors are doing well and offering more services, then it becomes extremely tough on the part of first 35

company, as they also have to offer services or else suffer by losing out to the competitor. It really becomes very tough to out play the competing company. Demand rate: All the branding and promotional activities have to suffer if there is a decline in the demand of the product or service of the company in the global economy. Thus decrease in demand will badly affect branding and promotional activities of the products (Holt, DB: 2004). In case company fails to meet their target, than they should try to make some necessary changes, in order to be on track. To achieve their in this global competitive arena & maintain the image of their brand. Selecting right channel to reach the potential customers and finally implementation of the strategy (Holt, DB, 2004). 2.13FINDING THE OJECTIVES OF THE BRANDS: Most important is to consider the goal of the company in order to achieve the targets and effective management of brand. Thus identification of the goals helps in the proper management of the brand. Image that companies want to emphasize should be able to clearly outline personality of the company in a right manner. When companies do branding of their product and services than it must depict the core competencies of the brand (Holt, DB: 2004). Effective management in an organization is required, if the firm wants to create a strong brand image for it and positions it correctly. A strong brand image acts as an asset for the company. Therefore companies must do complete analysis before taking any decision related to management of their brand. Which will result easily achieve its goals. (Holt, DB:2004).

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CHAPTER 3- RESEARCH METHODOLOGY Lets take a look at the Research Methodology that has been used in order to reach out to some results. Well first look at the results obtained from the research methodology. We will then take a broad view of the research study performed. First task would be to analyze why such a study is conducted in starting phase. We will work out to study strategies in accordance to the methodologies that have been used to reach out to some results Normally, we try to use research methodologies to look upon several rules which are used to come up with some conclusions. It must be understood that methodologies used by research is varied as per the research which is taking place. Thus, the area of prime focus is to know the problem for what research is carried out. This strategy assures that correct processes and tools are used in order to find answers of the questions being asked (Dev, 2005). 3.1 Research Question

There are large set of questions that this research would try to answer. Some of them are stated below: In the case of Automotive Industry, find out the effect of branding and promotion strategies in reference to BMW. Know several advantages of brand management in this cut throat competition and to find out whether the companies should use brand managements power and use portfolio management in the first place. To define benefits of branding, promotional activities in reference of automobile industry. To look in to the auto motive sector and predict its future.

The research undertaken currently comes with some solutions which are satisfactory and were stated above. In the case of automobile industry, the researcher would utilize several other data collection methods, along with some facts, figures which may prove of great significance.

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The prime concentration of the research carried out is to understand importance of sales promotion and branding activities, and their effect on the sales and ultimately image of the company as well as product. The research would also try to analyze and predict the next generation of the automobile industry and technologies coming in the way, for an automotive industry. In short, it would give us a brief about the near future predictions and an insight of the automobile industry. If we perform the research in a specific manner, it would also help us in suggesting the ways in which the productivity of the company can be increased, and ultimately how it can be transformed in the increase of sales of the company. 3.2 QUANTITATIVE METHOD

Quantitative method is one of many methods that are classified under quantitative techniques, and is this method has a method full of mathematical data and calculations. Hence we are provided with a tangible set of data which we can easily manipulate.

Advantages of Quantitative method: Its very efficient method, when it comes to approve or disapprove the research hypothesis. The statistical tools are used in order to analyze the set of quantitative data. It would help us in reaching out to the results with confidence. It shows how much unbiased are the results obtained from quantitative research. It would help us in testing and verifying the qualitative research.

3.3 QUALITATIVE METHODOLOGY The qualitative methodologies unlike quantitative methodologies do not have numerical calculations. In qualitative methodology major concentration is at various levels that interact with each other and are reached through interviews, sometimes personal, telephonic or in some other form. The non numeric data can be handled in a better fashion by following this method. The data can be gathered and assessed through number of ways. Some of these qualitative methodologies are stated below:

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Case study research: In this method, first of all the main problem is identified and there is an experimental enquiry done in order to investigate several other dynamics of business prevailing in automotive sector. Action Research: This is the research method in which main concern is on the number of conditions that cause problems for users. Accordingly, the solutions for these problems are found that from a part of behavior. Benefits of using the Qualitative method: The researcher can easily transform the questionnaire, as per the answers of the previous person interviewed. This is one of the most enduring facilities of using this method. The researcher can use his own thoughts on how he can interrogate with the respondents in effective manner and can get response of some tough questions. Apart from this, he/she is independent to provide some inputs by making some necessary changes in the set of questions asked from the respondents. Disadvantages of the qualitative methods of analysisThere is a greater possibility of getting errors in the final result by following several parameters that are part of qualitative research. This normally happens when these parameters are not chosen correctly. Thus, even if a small amount of error occurs in the calculations done, the result of whole research goes on a verge of fault. The qualitative research methods would help us to reach out to the solution of branding and sales promotion. As every research is time bound, there must be a proper time within which the research should get completed. Thus a research is worth only if it gets completed within time, and then only it would do justice to the entire research carried by the company. We cant deny the fact, if any research does not gets completed in proper time, it would take a large amount of resources as well as time and money. After analyzing pros and cons of the case, the researcher zeroed on to use qualitative analysis. Some of the reasons for the same are: To get new ideas and concepts. To understand the belief of customers. To understand the language of targeted group. It would help to use the language in which people normally feel easy. 39

To know what customers think about the product and its offerings (Adcock, Dennis, Halborg, 2001).

Methods used for this research: This is one of the most preferred methods used in order to reach out to the solution. In this research, mix of quantitative and qualitative research is used in order to complete the overall analysis. Quantitative research method is conducted to collect primary data and qualitative research method is conducted to collect secondary data. Now a days, to get an entire understanding about the case, this research is carried out, in such a way that one method gets overcome by other method. 3.4 SAMPLE

In this method, first of all a sample is picked from the entire population. Now some sampling techniques are applied on the sample taken to adjust it according to the result obtained from large population. There are a number of sampling techniques which can be used in order to sample a large set of population. Some of these methods are cluster based probability, judgmental sampling techniques and systematic probability, etc. The size of the sample is limited due to constraints such as time used for research and the amount of money spent. The most significant aspect of selecting a sample size is to select right sample size. Sampling method used for this research: The sampling method used for the research method is Deliberate Sampling. Deliberate Sampling is also known as Non-Probability Sampling. In this method some units are deliberately selected from the units of universe for making a sample, the unit selected can be considered to represent the universe. In Deliberate sampling, when the selection is based on the ease of access to the sample it is known as Convenience Sampling. This method is basically used for knowing the perception of the consumers of BMW. Population & Sampling-

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For the research the size of the sample taken is 100. The sample selected is from the consumers of the automobile industry and specifically the consumers whose inclination to use BMW is more. Method used to collect the data is communication via electronic mail, this method is selected to assure the completion of the research in time. The questionnaire designed consists of all the problems to be found out. The questions are designed in a interactive manner so that the respondents fill the questionnaire accurately and timely. The result derived from the survey can be generalized for population of the universe. 3.5 PURPOSE OF RESEARCH

In this research, the characteristic has descriptive properties. When the research was performed, several research tools would be used at various other levels to find one or the other thing. The techniques like explanatory or exploratory can be used to analyze the data.

The prime objective of this research is to find out the effect of branding and sales promotion from the design point of view, while purpose of this research from humanistic point is to increase the amount of services provided by companies.

The research would help to get a better view of the automobile industry. It would also help to unleash some facts that how the strategy is implemented by any company. In how many layers this planning of strategy is done. Some of the sections like literature review would help to provide some thorough understanding about the strategies devised by the company (Paul, 2006). Currently, the automotive industry is not able to fulfill all needs of the customers. This research would help the company to understand how they can improve their services and fulfill their needs. The companies can build customer relationship management and improve it accordingly on the basis of the outcome of the research. We would also study the global parameters that if accepted would drive major players on the path of success. The research paper would also try to give some recommendations about the strategies that companies should adopt in order to increase the growth avenues.

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There is direct correlation between sales promotion, branding and increase in the profits earned by the company overtime. Thus we cant take risk of underestimating how much important sales promotion and branding activities are (Adcock, Dennis, Halborg, 2001). 3.6 DESCRIPTIVE RESEARCH There are many type of research which can be conducted descriptive rearch are among that tool where each and every parameters are used in exploratory research work. Whenever there is high relationship is there between symptoms & cause than this type of research is very effective. When quantitative data is present than descriptive research is used which will result in final solution. 3.7 COLLECTION OF DATA

When research is conducted in that parameters are being assed and result is generated on the basis of this assessment. Data is collected from two main sources they are primary sources and secondary sources. Data is collected from many sources. Primary data is collected by conducting interviews and are also used electronically to send questions to various respondents via mail, etc. The secondary sources of data collection include brochures, leaflets and other available materials (Adcock, Dennis, Halborg, 2001). 3.8 RESEARCH TOOLS

Research tools that are used to measure the set of data have been collected majorly using primary and secondary sources of data. There is a detailed questionnaire and the answers got through interviews would be analyzed at the end of the research. In this case, sample size is set as 100.

It is understood that using right tools which can analyze data at the end is one of the major issue in carrying out any research. Initially, data is gathered through questionnaires and is saved in Excel sheets. A number of methods can be used to show this data in graphical manner. It can also be shown in the form of pie charts.

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We can get a clustered view of data which finally helps to analyse the data easily. SPSS is another tool that is used to analyze data, this tool also help by getting insight about the data collected and from where the data is collected.

3.9 DATA ASSESSMENT

After collecting data from different sources, we assess the data. It becomes necessary that the collected data must be analysed in the correct manner. As we are following qualitative approach, therefore we will design research in such a way that secondary data gets more importance, during evaluation of data. Another factor that helps in getting result is to have an understanding about brand and the promotional activities its following in the world. Method of AssessmentJustification: In todays World, its highly imperative to not only develop, but also to implement the promotional strategy most preferred. Today most of the companies are looking in order to increase their sales which is possible only through promotional. Thus its more often that promotions should be a part of branding. The scales used for doing survey justifies the importance of promotion in branding. If companies grow mature enough to understand how they can increase their profits by promotions , then its of major importance to them. This would only serve to get a competitive edge over other competing brands in the market.

Limitations of Study-The effectiveness of research is limited because of many constraints. Some of the constraints are the limited number of sources to collect data. This is followed by analysis, and result is thus more correct. Some of the major constraints are money, time and resources, due to which data is collected from some restricted sources only. The data set which is being analyzed in this case is small, therefore there is a probability that accuracy will have its own limitations in the given case (Fan, 2002).

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Chapter IV- DATA ASSESSMENT

A number of advantages are associated with brand building and sales promotion activities. The maximum advantage of brand building is that brand becomes a known name amongst consumers and many people start recognizing the brand. Apart from this people start to notice the brand and its products, and also brand makes product of any company to stay differentiated from clutter of several other brands in the market. The data collected is assessed through MS Excel, SPSS, etc. In this case, the count of respondents is limited to 100. 4.1 ANALYSIS

1. Should branding and promotional activities are necessary in any organisation? A large number of respondents agree that branding and promotional activities are of great importance in the organizations. It not only helps to boost sales, but also made people aware of the new products and many more. Responses Very Necessary Fairly Necessary Slightly Necessary Not Necessary at all Number of Respondent 76 17 0 7 Percentage 76% 17% 0 7%

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80 70 60 50 40 30
Fairly Necessary Slightly Necessary Not Necessary at all Very Necessary

20
10 0 Number of Respondent Percentage

2. As an organization should BMW resort to branding and promotional activities? The majority of the respondents gave an immediate positive response and said that it is extremely for BMW to carry branding and promotion activities as its directly going to affect the sales of company. However, just 13% of the respondents feel that its not that important. Responses Highly important Moderately Important Not important Not at all important Number of Respondent 78 13 0 9 Percentage 78% 13% 0 9%

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80 70 60 50 40 30 20 10 0 Number of Respondent Percentage

Moderately Important Not important Not at all important Highly important

3. What do you think about the branding efforts carried out by BMW, and how do rate it? Majority of respondents i.e. 86% opined that BMWs branding efforts has very high effect on different consumers. The behavior of customers can be altered by the help of Branding. Response Highly affective Not so affective Number of Respondent 86 14 Percentage 86% 14%

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90 80 70 60 50 40 30 20 10 0 Number of Respondent Percentage

Highly affective Not so affective

4. Is it true that branding and sales promotion activities are done to attract customers? Of all 98 percent respondent agree on the fact that branding and promotional activities play a very crucial role in creating brand image. In the automobile industry it stands at 98%. Only 2 percent of respondents disagree on the statement that these activities attract customers. Response True False
100 90 80 70 60 50 40 30 20 10 0 Number of Respondent Percentage

Number of Respondent 98 2

Percentage 98% 2

True

False

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5. Companies use which type of promotion methods to attract customers? Firms are using a number of promotion methods in order to attract customers like: The advertisements appearing on television are one of the most old, traditional and common way to attract customers. The television is preferred because of its reach in masses. The weekly or daily newspaper, journals, magazines, etc are part of print media advertisements, which are used by companies to attract customers towards themselves. They have an edge over other mediums as people who are reading these print media advertisements are segregated on aspects like place, religion, behavior, taste, which helps marketer to target the right customers. Marketers normally chose their target groups, and then employ best of their sales, marketing and promotion activities to get most of the customers from this group. Offering seasonal discounts on purchase of products is one of the most preferred way to attract customers and lure them to purchase the product. Increasing duration of services like giving warranties and replacement of particular part of the product, discount on bulk purchase or service. Today internet is one of the great methods to reach out to the masses. This is the only way why many firms have channels that carry their marketing and promotions through internet. The companies these days make their home pages on the social networking sites like facebook, twitter and try to connect to as many people as possible.

6. How much change according to you is enough for promotional framework and branding activities? Each company these days know the significance of building brand and sales promotion activities and how sales get affected by it for a longer term. Thus firms try to develop strategies that remain consistent for longer periods and there is minimum need to make a change. It also take care of all the 4 Ps of marketing while developing a promotional strategy. The strategy should be relevant on a global basis.

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Response Much stronger Less stronger 70 60 50 40 30 20 10 0 Number of Respondent

Number of Respondent 38 62

Percentage 38% 62%

Much stronger

Less stronger

Percentage

7. Give a brief about how companies are affected by the promotions carried out by them? The sales promotion affect companies on a larger extent, as volume of sales goes on increasing and discounts offered work in order to increase sales of the company.

8. Branding and promotional activities have capability to attract potential customers. What do you think in this matter? Around 91% of respondents opined that branding and sales promotion are highly attractive and are capable enough to lure potential customers. Response Highly attractive Moderately attractive Number of respondent 91 9 Percentage 91% 9%

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Less attractive

100
80 60
Highly attractive Moderately attractive Less attractive

40
20 0 Number of respondent Percentage

9. Do you think that branding and promotions carried out by companies have the ability to attract customers to make a purchase? Around 91% of respondents opined that branding and sales promotion are highly attractive and are capable enough to lure potential customers. Response Highly attractive Moderately attractive Less attractive Number of respondent 91 9 0 Percentage 91% 9% 0

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100 80 60 40 20 0 Number of respondent Percentage

Highly attractive Moderately attractive Less attractive

10. Do you think that customers are driven by the promotions carried out by the companies? Majority firmly felt that they get attracted by branding and sales promotion, and are interested in buying products which automobile companies are offering. Response Firmly agree Less agree Less disagree Firmly disagree Number of respondent 71 26 3 0 Percentage 71% 26% 3% 0

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80 70 60 50 40 30 20 10 0 Number of respondent Percentage

Firmly agree Less agree Less disagree Firmly disagree

11. How many people are willing to purchase the product after noticing the depth of branding, promotions carried out by the companies? Bottom line in any firm is highly affected by the sales and promotions carried out by the company. Most of respondents felt that they get affected due to campaigns carried out by the company. Of all the respondents, 71 percent agreed that branding and sales promotion influence them to an extent to buy that product.

12. Do you agree that, sales affected due to the promotions carried out by the organization? Response Firmly agree Less agree Less disagree Firmly disagree Number of respondent 71 26 3 0 Percentage 71% 26% 3% 0

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80
70 60 50 40 30 20 10 0 Number of respondent Percentage
Firmly agree Less agree Less disagree Firmly disagree

Of all the respondents, 71 percent firmly believe that the branding and sales promotion affect the sales of any company, while 21 percent of the respondents were less agreed, and only 5 percent disagreed on a lesser extent. 4.2 ASSESSMENT

The main purpose of the research is to find out whether branding and promotional activities play a vital role in the sales it drags attention, arouses interest, create desire and tend customers to take action. Moreover they are more effective for the automotive world. According to the interpretation and findings all branding and promotional activities tends customer to buy their products and spend their extra money on their products if they get satisfaction from the products. 4.3 DEMOGRAPHIC RESPONSE Generally Definition of Researchs is Gathering of data, information and facts for the advancement of knowledge. There are many methods of gathering data and interpretation of the data. In this research different steps were followed firstly, preparing the questionnaire and Secondly, sending this questionnaire to the various respondents electronically via an email. Thirdly, this questionnaire is sent to set of selected group of people of different age groups,

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working at different position in the auto motive sector in UK. Fourthly, collected data was analyzed. Fifthly, on the basis of analysis conclusion was given. 4.4 GENDER AND AGE OF RESPONDENTS

Respondents were both male and female. Age group taken was from 25 to 50 years. 4.5 DESIGNATION OF RESPONDENTS

To have fair assessment on the data, the set of questions were sent to various people of different designations and positions they hold in the organization. Most of them were managers or were working as executives. 4.6 TRAINING AND DEVELOPMENT OF ASSOCIATES

Several big companies of World organize training programs for their employees and executives, in order to make them realize the specialty of brand building and sales promotion. As it not only helps to increase revenue of company, but also increase productivity of company. 4.7 ASSESSMENT OF CHALLENGES

The major concern of the automobile industry today is not just sales, but to reduce the production cost and achieve economies of scale. Thus, most of the companies strive to achieve a proper ration between the brand building and sales promotion, so that the cost of production does not increase much. Its a fact that when global slowdown occurred in 2008, most of the companies in automobile sector were going through tough times including Automobile giants like Ford Motor Corp.

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CHAPTER V- SUMMARY, CONCLUSION AND RECOMMENDATIONS

5.1CURRENT SITUATION OF THE AUTOMOTIVE INDUSTRY Starting from the Second World, its evident from the data collected about the Automobile Industry that its going through rapid phase of transition. As per the data, around 70 million products were offered in market in 2008. These products ranged from personal cars to the vehicles used in commercial market. During last year, around seventy nine million vehicles were sold. But, soon the major markets for automobile industry like Japan and USA started to slow down due to global downturn. But as the dynamics started to change, demand in BRIC nations started to blossom at an unimaginable pace (The Economist, 2006). According to the facts, there are 750 million automobile industry around the World, and for this approximately 250 million gallons of fuel are utilized. There is an ever unprecedenting increase in the income level of people living in developing nations like India and China. So running a large number of vehicles is one of the main reasons for increment in the pollution levels. Just in order to avoid this pollution, a number of pollution standards has been defined. Thus increasing competition justifies the fact, how consumption patterns of different consumers are changing across the World. Result of Analysis of data: If any company wants to compete in the Global market place, its very important for them to develop core competency, and that is possible only by devising effective strategies. Companies these days rely heavily on branding and promotional activities to increase their market share. Around 77% of consumers are opined that branding and promotional activities are really very important for any firm to survive. Around 15% consumers opined that its fairly important. Around 85% of consumers think that branding strategies of BMW is effective, and very few believe that its less effective. Most of all, consumers have set a mindset that branding and promotional activities lure customers towards themselves. Thus, its proved that promotion and branding efforts attract the attention and remain in customers mind.

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a. RECOMMENDATIONS The automobile giants which are performing in the industry must know the changing demands, needs and trends of customers, so that they can come up with an augmented product. This force the companies operating on older technologies and following older methods to shift to new technologies which are far superior are able to cater the demands of customers on time. Due to increasing awareness and internet, consumers are well aware of the competing products in the same group. Its compelling companies to gain competitive advantage over other competitors. Companies have understood the importance of branding and promotional activities in the bottom line of firms. The company wants to reassure a fact that all of its branding and promotional efforts are aimed to cater to the needs of customers. Thus for long term benefits, its essential that product must be branded effectively. Firms can lure their potential customers by providing attractive financing options, giving discounts sometimes off seasonal discounts and after all providing them with a nice after sales service. b. RECOMMENDATIONS FOR FURTHER RESEARCH WORK

There is a great need to closely observe and understand the demands of customers and having regular information of the new trends, they want to have or prefer. Thus, its obvious that firms should go for a continuous market research, which help marketers to closely understand their target customers. However research and analysis is a key part, but the future planning and long term objectives should be kept in mind while devising any strategy. There must be a correspondence between several factors like price of oil and what is its effect on the automobile industry. Thus preparing for some uncertain happenings and possibilities in the coming time is also one of the thing kept in mind. Thus, there is a great scope of the research activities that help us to find out changing customer taste, preferences and changing dynamics of the automobile industry (Ludlow, 2002). The customers preference are changing rapidly, so its the objective of companies to undertake a deep study of customers choices and why they go for a particular brand over others. Moreover the automotive industry which is driven by a rapid growth in technology and new advancements

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everyday must be taken into account. The big automobile giants take a lot of efforts to study the taste and preferences of consumers by conducting market research and surveys, which aim to find out the exact answer of the question prove very useful in this matter. Many big companies put much of their money and efforts in market research and then take the managerial decisions in order to check their moves on each path. Thus market research provide a guide to the management to take long lasting decisions and the implications of these decisions on a much broader way. The auto industry is also concerned about the technology used and the changing trends. Due to ever changing technology they have come to know that having superior technology is no more an advantage as most of the competitors would start using these technologies in a small amount of time. Thus having a competitive edge may prove handy with respect to the competition. The competitive edge over competitors is of great significance whether it may be location of facility and factory, showrooms, employees, learned staff, etc. All of these have a major impact on all the aspects related to the company and more so ever on the profit margins and sales of the company. Thus, a perfect combination for any automobile industry today is the better use of technology combined with competitive edge over other competitors. The issue of sustainable growth is another important concern for major companies. The companies put a lot of effort and money to remain in the eyes of customers as one of the preferred brand. Many old companies which are famous amongst the customers push most of their efforts in order to keep pushing their brand towards customer and go slowly and steadily in the market with respect to the potential and the increased revenue year on year. To do market research by following methods and processes used for branding spare parts of BMW? To devise ways in which BMW performs branding of its products?

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APPENDICES: Questionnaire (Tick the suitable option) Organizations Name:.. Your Name:.. 62

1. Should branding and promotional activities be given importance in the organisation? o Extremely important o Fairly important o Slightly important o Not at all important 2. As an organization should BMW resort to branding and promotional activities? o Extremely important o Fairly important o Slightly important o Not at all important

3. How would you rate the branding efforts done by BMW? o Very effective o Less effective o Not effective 4. Do you think that promotional and branding activities attract customers? o Yes o No 5. On an average, how many changes according to you are enough in branding and promotional strategies framework? o Many changes o Few changes o No changes 63

6. Do you think that branding and promotional activities have capability to attract potential customers? o Very attractive o Moderately attractive o Less attractive o Not attractive 7. Does branding and promotional activities of any company attract customers to make a purchase? o Very attractive o Moderately attractive o Less attractive o Not attractive 8. Do you think that consumers get attracted by the promotional activities carried by companies? o Strongly agree o Strongly disagree o Slightly agree o Slightly disagree 9. How many people are willing to purchase the product after experiencing a strong branding and promotional activity? o Few o Many o None 10. Is the sales mostly affected by promotion of the organization? o Strongly agree o Strongly disagree 64

o Slightly agree o Slightly disagree

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