A Project Report On BMW Super Luxury Cars: BMW-The Ultimate Driving Machine

A Project Report on BMW Super Luxury Cars
BMW- The Ultimate Driving Machine
An insight into luxury car brand
Prepared By: Group 5
1. Srilasya G. (11FN-037)
2. Mudit Gupta (11DM-077)
3. Vikas Marwaha (11FN-115)
4. Soumya Ghosh (11DM-156)
5. Rohit Iyer (11FN-082)
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S.No. Topic Page No.
1. Introduction………………………………………………………….. 3
2. Luxury Car Market in India…………….………………………...... 4
3. BMW in India…………………………......................................... 6
4. Product Lineup…………………………………………………..…. 7
5. BMW India and Competition Product Mapping….……………..... 8
6. PESTEL Analysis of BMW …………………………………………. 8
7. SWOT Analysis of BMW……………….…………………………… 12
8. Porter five forces analysis…………………………………………… 13
9. Segmentation, Targeting and positioning strategy for BMW in India… 15
10. Marketing Mix ............................................................................................... 20
11. BCG Matrix and PLC for BMW 3 Series in India ........................................ 29
12. Survey Questions and Responses .................................................................. 30
13. Conclusion …………………………………………………………….. 32
14. Recommendation………………………………………………………. 32
15. Exhibit 1: BMW 3 Series monthly sales data………………………… 33
16. Exhibit 2: BMW Advertisement- Joy is life…………………………. 34
17. References ..................................................................................................... 35
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1. Introduction
BMW is an acronym for Bayerische Motoren Werke AG--or, in English, Bavarian Motor Works.
Whatever you call it, the German-based company is one of the world's most respected
automakers, renowned for crafting luxury cars and SUVs that offer superior levels of driving
enjoyment.
Founded in Munich, the company began in the early 1910s as an aircraft manufacturer. BMW's
current logo, designed to represent white propeller blades against a blue sky, reflects these
origins; its blue-and-white color scheme also references Bavaria's blue-and-white checkered flag.
It wasn't until 1928 that production began on the first BMW automobile, the Dixi. The car
proved tremendously popular, and its success helped the manufacturer weather the Depression.
BMW's best-known pre-World War II vehicle was the Type 328 roadster, a supple two-seater
that racked up over 120 victories on the motorsport circuit between 1936 and 1940. Postwar
BMW cars maintained this tradition, winning several racing, rallying and hill climb victories
The early 1950s saw the launch of the BMW 501, a roomy, voluptuous sedan that was
resplendent with all of the hopefulness of that era. It was soon followed by the 502 which was
powered by the world's first light-alloy V8, foreshadowing BMW's ongoing commitment to
developing new technology. The best-selling BMW of that decade was the Isetta, a petite two-
seat "microcar" typically powered by a 12- or 13-horsepower engine. The mid-'50s also saw the
debut of the limited production and breathtakingly beautiful 507 sports car which had an alloy
body and used the 502's V8 for propulsion. In the 1960s, BMW sales strengthened significantly,
thanks in part to the immense popularity of the 1500, a sporty family sedan. By the 1970s, BMW
was establishing itself as a full-fledged car company.
It was a pioneer for many emerging technologies, including turbo charging and advanced vehicle
electronics. This was also the period when BMW of North America was established and
consumers, who coveted both sports and luxury cars, became loyal "Bimmer" owners. The '70s
also saw the birth of BMW's three-tier sport sedan range consisting of the 3 Series, 5 Series and
7 Series cars and the creation of its performance M division. More recently, the company has
been expanding its reach worldwide. It opened its first U.S. manufacturing plant in the latter half
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of the 1990s and has expanded its brand empire to include Mini and Rolls-Royce. BMW also
continues to build motorcycles, something it has done since the 1920s.
The automaker's famous advertising slogan describes each of its vehicles as "the ultimate driving
machine," and it's not mere hyperbole. Over the past couple of decades, BMWs have become the
standard for performance and luxury in most of the "over $30,000" segments. With family-
friendly wagons, crisp sedans, distinctive coupes, nimble sports cars and spacious SUVs offered,
BMW's model roster is diverse. But its luxury vehicles all share a common characteristic: the
ability to make drivers feel gloriously connected to the road.
2. Luxury Car Market in India
A luxury car is a luxuriously styled automobile which is designed to give satisfaction and
comfort to its owner. A luxury car typically has carrying capacity of 6 passengers. The luxury
cars in the Indian market are very expensive, with price tags that start from 20 lakh. Hence,
luxury cars can only be afforded by the people who belong to the high income group and there
are a lot of such takers in the Indian automobile market.
The recent growth in the luxury car market in India is much more than mere market dynamics in
a particular car segment. It is a reflection of the changing lifestyle of the affluent class in
the country. In India, the luxury car segment (Average Price 25-30 Lakh) has been growing at
an average rate of 20% or above during recent years; it seems to be least affected by the
global financial crisis. During worst recession period when world was facing low market
demand trends, Indian luxury car segment grew at 23% to 6,671 vehicles according to the
Society of Indian Automobile Manufacturers (SIAM) despite a 0.5% decline in passenger
car sales, to 11.04 lakh vehicles (April-December 2008 Report). But financial year
ended March 2010 has shown growth of automotive sector up by 25% to 15.26
lakh vehicles. This indicates optimistic sign of recovery of sector. While the
Indian auto industry is expected to grow at 17% to 19% on an average, sales of luxury
and super-luxury cars are expected to grow exponentially.
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Luxury car segment accounts only for 3-4% of total car sales in India. But what lures the
international majors is the fact that this segment is growing at 25%-plus (2009 sales), much
higher than 15-17% growth registered by the small passenger car segment over the past few
years. This growth of luxury car sales is driven majorly by increased wealth-creation within
average Indian population and the desire of individuals to join the millionaire-club by
flaunting their wealth.
2.1 Luxury car majors in India
Mercedes-Benz, BMW and Audi put together have around 85% market share. The German
car brand Mercedes-Benz had first-mover advantage as it had started operations in India in
1995 and there was no direct competition in this category. So, it remained ‘Numero
Uno’ luxury car brand in India for more than a decade. But, market dynamics have
changed significantly after the entry of BMW in 2006 followed by Audi in 2007.
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The overall market share of luxury cars has been reorganized due to the new
entrants. This has resulted in new equations being forged amongst the various players, driven
primarily by a rapidly swelling millionaire-club having diversified choices and preferences. In
2006, BMW had 9% market share which has now grown to 42%, catapulting BMW as the
number one luxury brand in terms of sales. Audi which started its operations in 2007 has had the
fastest growth-rate amongst the three and has now captured 20% of the luxury car market. So,
the Indian luxury car market is favorable for new entrants who are capable of grabbing the
untapped opportunities by following the customer-oriented approach and having ability to
induce demand by innovation at each level of marketing mix.
3. BMW in India
BMW entered the Indian car market in the year 2006 with the launch of its first BMW model.
The company established a sales subsidiary in Gurgaon in 2006 to develop its dealer network. In
2007, BMW set up its first state of the art manufacturing unit in Chennai. The company's India
based manufacturing units cater to the local markets. Currently BMW has a network of 25
dealers across the country and plans to increase it up to 40 by the end of 2012 mostly in Tier II
cities. The company imports most of its critical components from its overseas supply base; with
only 10 per cent content sourced from the domestic market, which includes seats, leather and
door-panels.
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4. Product Lineup
The BMW lineup consists of highly elegant and exotic cars including the 1 series, 3 series, 5
series and 7 series to be hybrid cars made exclusively to meet the needs of highly executive
people and officials from very sound professional backgrounds. These cars are simple yet elegant
and have many accessories that make them unique in all terms. In addition to this, there is an
SUV known as the X3. The M series in BMW is made exclusively in sports related to cars. This
product line of BMW is loved by many car lovers for the sporty looks as well as the classic
engine.
Cars from Bmw in India
BMW
BMW 3-Series 6-
BMW 5-Series (Sedan) Series BMW 7-Series (Sedan) BMW (SUV)
(Sedan) (Sedan
)
BMW BMW BMW BMW BMW BMW BMW BMW BMW BMW BMW BMW
3-Series 3-Series 3-Series 5-Series 5-Series 5-Series 5-Series 6-Series 7-Series 7-Series 7-Series 7-Series BMW BMW
320i 320d 325i 523i 525i 525d 530i V8 730Ld 740Li 750Li 760Li X-5 X-5
(Petrol) (Diesel) (Petrol) (Petrol) (Petrol) (Diesel) (Petrol) (Petrol) (Diesel) (Petrol) (Petrol) (Petrol) (SUV) (Diesel)
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5. BMW India and Competition Product Mapping
6. PESTEL Analysis of BMW:
1. Political:
 Land allocation policies: Land-use conversion is time consuming and becoming
complex. It directly affects BMW, which is planning to increase its production capacity
of Chennai plant.
 Taxation: The government may reduce taxes on smaller, fuel-efficient cars while raising
them on older, oil-thirsty vehicles. BMW is directly affected because selection of their
vehicles have a high performance petrol engine, which means customers will think twice
when buying one
 The consumer protection act: The consumer protection act makes it illegal for BMW to
provide cars in a dangerous form. Therefore BMW needs to make sure that all their cars
are thoroughly checked and awarded that they are safe before the on set of purchase in a
dealer showroom.
 Local politics: Local politics plays a big role in land and property acquisition.
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2. Economical:
 Inflation: Due to inflation the cost of production increases rapidly due increase in cost
of required raw materials, labor etc, thereby increasing price of cars and decreasing its
demand.
 Economic Growth: Due to economic slowdown GDP rate of India is falling and
because of which the purchasing power a country’s people is decreasing and they tend to
save more money. This can affect sales of BMW.
 Efficiency of free market: In India the auto sector is open to all, hence it is fiercely
competitive. More and more automobile manufacturers are entering the luxury car
segment. Luxury car manufacturers like BMW find it difficult to capture and maintain a
profitable market share.
 Quality of infrastructure: Due to the lack of proper infrastructure like roads, petrol
pumps, distribution ports and commercial property most car manufacturers have to
confine their operations mainly to the urban and metro areas. The above constraints
cause problems for expansion plans and also increase distribution cost.
 Interest Rates: A high rate of interest causes difficulty in raising capital for expansion
and growth of business since it is costly to borrow money. This may in turn slow down
the growth of the venture.
 Exchange Rates: The exchange rates of a country affect the demand and feasibility of
importing goods and exporting goods
3. Socio-Cultural Factors:
 Young Consumer: India being one of the youngest countries in the world has
significant presence of youth. This offer a big opportunity for BMW. These young
people have grown up with internet and are exposed to better living standards. Also,
they start making money at an early age. These young people who consider spending
more money for performance and quality.
 Availability of Easy Credit: Presence of car loans has increased the purchasing power
of the customers.
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 Growing Urbanization: Growing urbanization is converting the people from net saver
to net spenders.
 Awareness level: Due to the rise of social media network tools and other mass
communication tools awareness level is increasing. Because of these, tools offers and
scheme of the BMW can reach the customers very fast.
 Aspiration: Due to the westernization of Indian culture, consumer behavior is
changing. Like now consumers are now more interested in stylish products than they
were 10 years ago. Also, it is changing the aspiration value of the customers and
offering an opportunity in front of BMW to catch the opportunity.
 Unemployment: This is one of the most important factors that affect economy
adversely. Due to weak global economic conditions, investment banks are recruiting
lesser number of people and firing extra staff. Because of this, the demand for luxury
cars decreases which further decreases demand for producing such goods, as people tend
to save money and cut back on spending.
 Increase in no. of working women: Because of increase in the work force of women,
the characteristic and composition of the potential buyers of BMW is changing.
4. Technological Factors:
 Supply Chain Management: Over the years supply chain has been strengthened by
incorporating technology. It has made possible high participation of the manufacturer
and dealers in the market flow of cars.
 Demand Forecasting: Soft wares are available for demand forecasting, merchandising
and seasonality management which if effectively used can change fortunes.
 Data Mining: There has been a great surge in data mining activities for better
understanding of market demand patterns and consumer buying behavior to arm
themselves with the best offerings.
 Customer Support Activities: Better customer support and grievance addressing has
been possible due to EDI (Electronic Data Interface), QR (Quick Response) and ECR
(Efficient Consumer Response) systems.
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 Strategy Building: BMW can incorporate decision making tools at various levels to
build the best strategy by collecting and collating data from various sources.
 Going Online: Effective online activities can be used for building customer relations,
advertisement & promotion, customer support and brand building.
5. Environmental Factors:
 Customer awareness towards environment: Customers are becoming more aware
towards environment. By demonstrating concern towards environment, BMW can
generate good will.
 Environmental policies: Environmental policies are becoming more stringent than
before. By reducing the carbon emission and designing more efficient cars, BMW can
get benefit from government.
 Global warming: More and more people and getting aware about the issue of global
warming. BMW can provide superior and eco friendly design like electric cars, cars
using bio fuels to generate goodwill and acceptance.
6. Legal Factors:
 Custom Duties: Customs duties are levied on import of parts in India.
 Prolonged Judicial Process: For settling property disputes, it consumes lot of time.
 Labor Laws: The rigidity in labor laws has led companies to increasingly resort to
outsourcing and contracting of labour. Labor strikes are quite frequent now. Since
BMW plans to expand its existing capacity, rigid labor laws can adversely affect it.
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7. SWOT Analysis of BMW:
SWOT Analysis-BMW India
Strengths: Weakness Opportunities Threads
Product
Fails to appeal Number of
development on
wider range of millionaries in India
core platforms. Increasing oil prices
people due to are increasing
Keeping its brand
affordability of car. rapidly
intact
BMW in Maintenance cost is Leverage brand Environmental

dependently owned very high Image issues
Associated with
highly expensive
Dealer base Government
Focus on Being the products. Not able
expansion to teir II policies are
best to atract vast pool
cities changing
of middle class
people in India
Growing Market
Extensive
Segment can be
Distribution
exploited with sub-
Channel
brand model
Implemented a
Strategy which
encompassed
supportive
marketting
program
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8. Porter five forces analysis
Porter five forces analysis is done for strategy formulation for BMW.
Substitution-
Luxury
Segment.
Low Threat
Competition- Buyer Power-

Supplier Power-
Audi/ High
Control across
options, Few
supply chain Mercedes purchases
Low Threat High Threat Medium Threat
New Entrants-
Lucrative
market
High Threat
1. Threat of new competition
Luxury car segment is very attractive segment which is growing at high rate even during
economic slowdown. By giving higher returns this segment is attracting new firms like Audi.
Audi has already acquired 20 % market share within just past two years. Als , the capital and
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expertise needed to setup an auto or parts manufacturing facility will not be a deterrent for world
class auto manufacturer like Audi.
Given India's luxury markets incredible growth forecasts, infrastructure progress (especially new
and better roads), and ever-expanding financing options to residents, the market is attractive.
Thus, the threat of new entrants is high.
2. Threat of substitute products or services
India is famous for its two-wheelers (bikes and mopeds) and three-wheelers. These are very real
and obvious threats to lower segment auto manufacturers. But for car makers in luxury segment,
there will not be significant thread from these products.
3. The bargaining power of buyers/customers
Buyers in India have a wide variety of choice. There are more than 20 foreign manufacturers
selling in India (including ultra high-end such as Lamborghini). Because of plethora of choices,
bargaining power of buyers is increasing. However, since BMW is in the ultra high end segment,
the demand in that segment is generally price inelastic.
4. The amount of rivalry among competitors
Fierce competition among the major car players can be witnessed in the Indian Car industry. The
constant changes in the existing car models with regard to design, innovation, technology, and
colors, have led to a fiercely competitive market. Now that technology and innovation are not
alien concepts for Indian car makers, Indian cars are becoming increasingly sleek, stylish, and
luxurious. Almost all the major luxury car manufacturers are planning to expand in India.
5. The amount of bargaining power suppliers have
BMW imports most of its parts from Germany and manufactures the remaining parts at its
Chennai manufacturing plant. Because of this the thread from bargaining power of the suppliers
is low for BMW. Apart from it BMW also has an exclusive dealership chain which has helped it
to control the entire supply chain effectively. Thus the thread from suppliers is low for BMW.
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9. Segmentation, Targeting and Positioning of BMW in India
9.1 Segmentation strategy for BMW in India:
A. Segmentation of car market
Budget Car Segment

Over 60 % of the market
Preferred price range below Rs. 2.2 lakhs
Compact Car Segment

Around 15 % of the market
Preferred price range: between Rs. 3 lakhs and Rs. 4.5 lakhs
Family Car Segment

Around 10 % of the market
Preferred price range: between Rs. 4 lakhs and Rs. 5 lakhs
Premium Car Segment

Real world-class car and people who are ready to pay for it
Preferred price range: flexible but around Rs. 6 lakhs is acceptable price.
Super Luxury Saloon

A tiny segment
BMW mainly sells this segment of the market.
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B. Segmentation of Customers
S. Base Type Segmentation Explanation Segments

No. Criteria
1 Geographic City Different tier of cities Tier 1, Tier2, Tier3, Metros

have different needs,
buying patterns, culture
and other differences. For
example cities with high
income and population
density are more suitable
for luxury car maker like
BMW
2 Demographic Age Different age groups  less than 18 years

have requirements from a  18 years to 28 years
car. Pattern of usage and  28 years to 42 years
criteria of selection is  42 years to 60 years
different for different age  more than 60 years
group
Income and Different income levels  Earning less than 20 lacs

Purchasing have different spending  20 lacs to 50 lacs
power capacity. People with  50 lacs to 1 crore
lower income level  More than 1 crore
cannot buy luxurious
cars.
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Occupation Occupation plays an Unskilled worker, Skilled
important role in worker, Petty traders, Shop
choosing luxury products owners, Businessmen,
due to time constraints Industrialists, Self employed
and timing variations of
work.
Gender Buying patterns vary a Male,Female

lot between male and
female. Generally male
are more prone to
purchase sports car
3 Psychographic Lifestyle Within the high income Usage oriented, Style

bracket, we can further oriented, Outlook oriented,
divide by buying pattern Performance oriented.
of customers. Some
customers use these
luxury cars as status
symbols, some use them
as utility vehicles, and
some use them for long
distance drives.
4 Behavioral Loyalty Status People with low or None, Medium, Strong,

medium loyalty for other Absolute
luxury cars are more
prone to switch to BMW.
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9.2 Targeting
S. No. Base Type Segmentation Segments Target Segment

Criteria
1 Geographic City Tier 1, Tier2, Tier3, Metros Metros, Tier 1
2 Demographic Age  less than 18 years  18 years to 28 years

 18 years to 28 years  28 years to 42 years
 28 years to 42 years  42 years to 60 years
 42 years to 60 years
 more than 60 years
Income and  Less than 20 lacs  20 lacs to 50 lacs
Purchasing  20 lacs to 50 lacs  50 lacs to 1 crore
power  50 lacs to 1 crore  More than 1 crore
 More than 1 crore
Occupation Unskilled worker, Skilled Businessmen,
worker, Petty traders, Shop Industrialists, Self
owners, Businessmen, employed
Industrialists, Self employed
Gender Male, Female Male
3 Psychographic Lifestyle Usage oriented, Style Style oriented, Outlook

oriented, Outlook oriented, oriented, Performance
Performance oriented. oriented.
4 Behavioral Loyalty Status None, Medium, Strong, None, Medium

for other Absolute
luxury car
makers
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9.3 Positioning
Taglines used by BMW: ‘Ultimate Driving Machine.’
Product Target Customers Benefits Value Point of Point of Differentiati
Proposition Parity Differen on Strategy
ce
BMW Young/Medium Superior A product Comparable Better Extensive

luxury age group male in Quality, that prices product Distribution,
cars high income group High provides the Placing Superior
in metros and tier 1 Performa best Strategy Quality
cities with nce, performance
performance and highly , style and
style conscious stylish quality
lifestyle, low
loyalty status for
other cars and
white collar jobs.
Positioning Statement: To young working male customers in high income group, who are
conscious about style, performance and quality, BMW is the best quality, performance car. With
BMW, you can make driving a fun and luxury a way of living.
Positioning Diagram for BMW: High Quality

BMW cars
Low Price High Price
Low Quality
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10. Marketing Mix:
Based on the target customer and positioning of the product, marketing mix is decided for the
target customers.
10.1 Product:
BMW provides dynamic, sporty, innovative and aesthetic brand to the target customers. The
product design ensures the superior performance, features and quality. Main features of BMW
cars are:
Features Special Design Features Benefits
Exterior Features • Halogen headlights with complex Superior looks, Attractive

surface lenses Design
• Luxury trim: alloy & leather on
shifter, wood/woodgrain on doors and
wood/woodgrain on dashboard
• Moonroof
• Panorama roof
Interior Features • Cargo Cover Comfort for the Driver,
• Cargo Net Superior ambience inside the
• Cup Holders car
• Leather-Wrapped Steering Wheel
• Premium Interior Trim
Safety • Brake Assist Safety of passenger by design
• Child Safety Seat Anchors itself, assistance in emergency
• Driver Air Bag situation.
• Engine Immobilizer
• Front Fog Lights
• Head/Curtain Airbag
• Internal Emergency Trunk Release
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• Passenger Air Bag
• Rear Airbag
• Stability Control
• Tire Pressure Monitoring System
Sound and • Compact Disc MP3 Capable Makes driving a fun, provides
Entertainment • Compact Disc Player luxurious environment
• iPod Connector
Seats • Leather Seats Best quality seats, comfort
while driving
Tires and Wheels • Alloy Wheels Robust tires, enables driving on

rough roads.
These all features are designed for target group
10.2 Price
The pricing Strategy for BMW can be understood by determining the price demand sensitivity.
The demand for the luxury cars are generally price insensitive. However, the pricing for various
models of BMW shows that some models of BMW are price sensitive since they cater upper
middle class customers.
BMW X1 Rs. 22,61,879
BMW 3-Series Rs. 24,63,678
BMW X3 Rs. 41,39,233
BMW X5 Rs. 55,25,867
BMW Z4 Rs. 62,51,563
BMW 5-Series GT Rs. 65,66,659
BMW X6 Rs. 69,69,227
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BMW M3 Rs. 76,41,238
BMW M5 Rs. 1,00,50,178
BMW M6 Rs. 1,22,34,451
Price - demand elasticity for BMW
For Price Range above 40

lacs, demand is mostly in elastice.
Models in this price range: BMW
X3/X5/Z4/BMW 5 series GT/
BMW X6/M3/ M5/M6/ BMW
series 6/ series 7
Price
For Price Range

between 20 lacs to
40 lacs, demand can
be elastic. Models in
this price range:
BMW X1/ BMW 3
series/ 5 series
Demand
Thus from the above curve it is clear that most of the models of BMW lies in the higher price
band (above 40 lacs) and they are mostly in the region of demand inelasticity with price. It is
because of this, BMW always focuses on quality and performance rather than price. It customers
are willing to pay more for superior quality.
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10.2.1 The pricing strategy
Premium pricing
Most of the luxury car makers follow Premium pricing strategy in which they keep the price of a
product high in order to encourage favorable perceptions among buyers, based solely on the
price
Competition oriented pricing

However within the lower price band segment they follow competition oriented pricing. For
example: The Volvo S60 D5 price in India is Rs 37 lakhs, BMW 320D is at Rs 35.7 lakhs and
Mercedes C220 CDI price in India is Rs 33.2 lakhs
BMW Financial Services

BMW Financial Services India operates as a Non-Banking Finance Company (NBFC) in India to
offer solutions for Retail Financing for BMW customers and multi make customers, Financing
for Fleet owners and Commercial Financing for BMW Dealerships and multi make dealerships.
BMW Financial Services India offers Insurance solutions to its customers through its
cooperation partner. BMW Financial Services has been successfully operating in India as a part
of BMW India with its three business lines:
• Retail finance
• Commercial finance for the BMW India Dealerships
• Insurance solutions through cooperation partners for BMW customers.
Packages and options for customers

BMW also provide add on feature options for customers. This helps the customers to add the
features based of his/ her price range.
Pricing strategy for BMW X1

With its aggressive price tag, the BMW X1 (22.4 lacs) will not only target customers from
luxury car manufacturers like Mercedes and Audi, but also find buyers in consumers who are
looking to upgrade from a Toyota Fortuner or a Hyundai Santa Fe, which are available at lower
price tags.
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10.3 Promotion
Advertisement
The BMW Club

BMW Studio
of India
BMW Art Cars Direct

exhibition Marketing
Promotion
Association Collaboration
with leading with e-bay-
fashion online
designers promotion
BMW Golf Cup- Film

engaging Advertising-
customers/ BMW short
dealers films
1. Advertisements:
For very many years, BMW branding centered around “Drive“, and the manufacturer proudly
promoted itself as the ‘Ultimate Driving Machine.’
This tagline became synonymous with BMW, but since 2008 it began to shift i s emphasis on to
“Joy“. It provides a ‘behind the scenes look at the making of the famous
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‘Joy is BMW‘commercial –
This commercial doesn’t aim to promote individual vehicles, instead it tells potential consumers
the story of the whole brand.
The viewer feels as though being part of this community must be a very positive and magical
experience as it appears to make everyone involved extremely happy.
The BMW Club of India

BMW provides facilities and luxurious lifestyle to its customers by providing facilities like
BMW club of India. The BMW Club of India is a not-for-profit organization whose activities are
funded primarily through membership fees. The BMW Club is arranges a wide variety of social,
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technical and driving events, including autocross, high-performance driver's education, rallies,
club racing and owner education on topics such as mechanical repair, automotive maintenance
and collecting vintage vehicles.
BMW has already roped in stars like SRK, Gul Panag for promotion of The BMW Club of India
Direct Marketing Strategy

BMW is one prominent user of the direct marketing strategy. It has employed this style of
advertising to boost its brand position.
BMW spends huge some of money on direct marketing which the hope of having a massive
impact on future sales.BMW sponsors online podcasts to get its branding across as well as it
invests in email marketing.
BMW also uses software for Data cleansing to improve the quality of its distribution lists so that
the right people with in-date addresses are targeted.
Collaboration with e-bay

In May 2011, eBay Advertising and BMW announced a new advertising campaign to support the
leading car maker’s first venture into e-commerce. The campaign employed a variety of different
targeting techniques to provide relevant advertising to users and drive sales conversions for
BMW, including:
• Category targeting: High impact brand advertising on the eBay Motors homepage
• Keyword targeting: eBay shoppers searching for ‘BMW’ or relevant searches of automotive
parts and accessories were served BMW branded adverts to direct them to the BMW store
• Behavioral targeting: raised the awareness of the BMW store by targeting shoppers who
have already visited the Vehicle Parts & Accessories category on eBay and fit the target
demographics of BMW car owners
• Re-targeting: advertisements served to eBay shoppers who had already visited the
BMW.co.uk website and re-engage with users who showed an interest in BMW
Film Advertising
BMW is one of the prominent users of film advertising where they are combining the ideas of
producing a series of short films and using the Internet in an advertising campaign. BMW
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assembles a cast of A-list directors and actors, and develops scripts within the basic framework
of having a central character that helps people through difficult circumstances using deft driving
skills—in a BMW. Thus, the car becomes the star.
Other Innovative marketing activities

• BMW Golf Cup International organized golf tournament across ten cities – Kolkata, Bangalore,
Chennai, Hyderabad, Delhi, Chandigarh, Pune, Mumbai, Ahmedabad and Gurgaon. It invited its
customers, prospects and opinion leaders to take part in this tournament and provided the right
mix for an exclusive social interaction.
• Formal dining and wine tasting events at leading BMW dealerships across India.
• Communication of the rich heritage of BMW Eras through association with leading fashion
designers and events such as the India Couture Week.
• Indulging customers in lifestyle events such as Culinary Workshops and Art Exhibitions at
the BMW Studi.
• The BMW Art Cars exhibition that was held at the Jahangir Art Gallery in Mumbai.
• Conceptualized the BMW Studio on Janpath as a venue where our customers can indulge with
the brand in an exclusive environment.
10.4 Placement
Chennai
Manufacturing/Assembling Dealers Across the country Customers
plant
27
BMW India uses exclusive distribution strategy which involves limiting distribution to a single
outlet. Since BMW cars are highly priced it requires the dealers to place much detail in its sell.
BMW knows that top down approach doesn't really work in such kind of selling. Also, for
deciding location within a city, they select an area where the buying potential is present like
upcoming areas and established areas. So, based on the perceived demand they set up their
dealers.
BMW does not have company owned dealerships, but retail partners. BMW focuses more on its
core values of manufacturing of premium cars and leave the selling to the retail people who have
a local connect.
Dealership in India
BMW India is the pioneer in bringing luxurious dealerships to India. BMW India has set a
decisive course by setting up BMW dealerships of international standards across the country.
BMW India has also set very high standards in service quality and customer care. BMW knows
the importance of dealership in sales generation. That’s why they select the dealers based on
criteria like:
• Dealer location ensures that the potential customers get the best of strategic advantages.
• The ambiance and the customer service should be such that the customer feel welcome at
the car dealers place.
• Build up the reputation and contribute towards the growth of the company's market share.
• Should act as a catalyst to promote the sales
By end of 2012, BMW India will aggressively expand its dealer network by increasing the
number of outlets to 40 across major metropolitan centers and emerging markets in India (from
the present 25 outlets).
Currently, BMW India is present at 19 cities in the Indian market; New Delhi, Mumbai,
Gurgaon, Indore, Chandigarh, Bangalore, Hyderabad, Chennai, Pune, Kolkata, Bhumneshwar,
Ahmadabad, Surat, Kochi, Coimbatore, Jaipur, Raipur, Goa, Ludhiana.
28
11. BCG Matrix and PLC for BMW 3 Series in India
To plot the PLC for BMW 3 series, monthly sales of BMW 3 series were used.
BMW 3 Series Monthly Sales

350
300
Number of units sold
250
200
150
Series1
100
50
Nov-11
May-07
May-08
May-09
May-10
May-11
Feb-07
Aug-11
Aug-07
Aug-08
Aug-09
Aug-10
Nov-07
Nov-08
Nov-09
Nov-10
Feb-08
Feb-09
Feb-10
Feb-11
From the above curve it can be observed the BMW 3 series is more or less entering the maturity
phase from the growth phase. Based on PLC we can plot the BCG matrix for BMW 3 Series.
Relative Market Share
High Stars Question
Mark
Market Growth
Rate BMW 3 Series Dogs
Cash Cows
Low
High Low
29
12. Survey Questions and Responses
 A total of 8 questions
 4 personal details questions
 4 questions on Buying Preferences
 Sample Size: 44
 Surveying method: Online Form Filling
 Surveying Period:
 First Entry – 10th Jan’12 – 22:00hrs
 Last Entry – 14th Jan’12 – 23:55hrs
 About the surveyed:
Gender Monthly Income
20 lacs to
50 lacs
Female more than 20%
Male 1 crore
43% 39%
57% 50 lacs to 1
crore
32%
less than
20 lacs
9%
Which Region you belong to? Age Group you belong to?
More than 18-28

West 60 23%
34%
23%
North
50%
42-60
18%
South 28-42
16% 36%
30
 About their buying preferences:
Rate of the following attributes that (might Compared to other cars that are available, would you
have)enticed you to try the BMW (initially)? say that BMW is:
Customer About the

care same
11% 14%
Good Looks
27%
Performance Much better
18% 38%
Somewhat
Driving better
Best Quality
experience 41%
20%
24%
Somewhat worse
7%
What concerns you the most when Are Cars Still Status Symbols?
buying a car?
Speed
No
Brand
22% 25%
32%
Safety Price Yes

20% 17% 68%
Warranty
16%
 Analysis of Survey Results

 Key points from the survey about the customers:
 Majority of Indian Customers still believe cars as a status symbol.\
 While purchasing a luxury car, people are more concerned with brands, speed and safety
rather than price and warranty.
 Majority of the users of BMW are satisfied from its performance and consider it superior
from other brands.
 Before purchasing new car like BMW, majority of people are concerned with good looks and
driving experience.
31
13. Conclusion
BMW has clearly established strong brand identity and equity, and the series 3 has become a
leader in the mid level luxury performance segment. BMW is associated with premium
performance, high class luxury and unquestionable quality. BMW has now established itself in
the Indian market and it has now ample opportunities to build on its strong brand equity. Indian
luxury car segment is poised to grow at a high rate and BMW is in a good position to leverage
that; however in order to tap that market, BMW shouldn’t dilute its brand.
14. Recommendation
 BMW should continue to build on its strong brand as well as prestige of series model.
 The company should continue to produce clever advertisement and place the
advertisements across all mediums, especially on the internet.
 BMW should invest in fuel efficient technologies for their performance lines. Although
their cars are very stylish, there are many cars performing better than them in terms of
fuel efficiency.
 Company should leverage advanced IT tools and technologies in the field of product
promotion, new product development and distribution network.
 BMW should try to capture female customer base as the number of working women in
India is rising rapidly.
 Company should maintain its strong brand and shouldn’t dilute its brand by selling sub
standard brands at lower prices.
 BMWs accessories and parts of cars are expensive for maintenance, which can reduce the
desire of people purchasing its cars. Therefore they should try to increase the availability
of its parts at lower prices.
32
15. Exhibit 1: BMW 3 Series monthly sales data
Number of units Number of units Number of units

Month sold Month sold Month sold
Feb- Jun-
12 76
07 Oct-08 10 188
Mar- Nov-
33 52
07 08 Jul-10 196
Apr- Dec- Aug-
76 79
07 08 10 229
May-
88 99
07 Jan-09 Sep-10 187
Jun- Feb-
80 102
07 09 Oct-10 198
Mar- Nov-
28 116
Jul-07 09 10 193
Aug- Apr- Dec-
62 109
07 09 10 204
May-
93 44
Sep-07 09 Jan-11 164
Jun- Feb-
75
Oct-07 09 64 11 176
Nov- Mar-
109 77
07 Jul-09 11 305
Dec- Aug- Apr-
87 96
07 09 11 240
May-
56 88
Jan-08 Sep-09 11 195
Feb- Jun-
57 116
08 Oct-09 11 163
Mar- Nov-
90 156
08 09 Jul-11 126
Apr- Dec- Aug-
72 189
08 09 11 203
May-
80
08 Jan-10 192 Sep-11 236
Jun- Feb-
86
08 10 234 Oct-11 298
Mar- Nov-
101
Jul-08 10 298 11 243
Aug- Apr- Dec-
114
08 10 176 11 289
May-
98
Sep-08 10 165
33
16. Exhibit 2: BMW Advertisement- Joy is life
34
17. References
 http://www.bmweducation.co.uk/coFacts/view.asp?docID=61
 Hespos, T. (2002) “BMW Films: The Ultimate Marketing Scheme, retrieved October 3,
 2005, from http://www.imediaconnection.com/content/546.asp
 Giardina, C. and Lehane, S. (2002) "The Driver Returns," retrieved October 3, 2005, from
http://www.dtvprofessional.com/2002/12_dec/features/bmw_returns.htm (2002) "BMW
Films," retrieved October 3, 2005, from
http://www.pmalink.org/awards/reggie/2002reggiewinners3.asp
 www.bmweducation.co.uk/company history
 www.bmw.co.uk/models
 www.bmw.co.uk/prices www.bmweducation.co.uk/companyfacts.shtm
 www.bmweducation.co.uk/statistics \
 Kotler, P. and Armstrong, G., (1989) Principles of Marketing, Prentice-Hall International
Edition.
 David Jobber, Principles and Practice of Marketing 5’th Edition www.just-auto.com
http://www.supercarworld.com/cgi-bin/overview.cgi?BMW
35

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A Project Report on BMW Super Luxury Cars

BMW- The Ultimate Driving Machine

An insight into luxury car brand

Prepared By: Group 5

2. Luxury Car Market in India…………….………………………...... 4

5. BMW India and Competition Product Mapping….……………..... 8

6. PESTEL Analysis of BMW …………………………………………. 8

7. SWOT Analysis of BMW……………….…………………………… 12

8. Porter five forces analysis…………………………………………… 13

9. Segmentation, Targeting and positioning strategy for BMW in India… 15

10. Marketing Mix ............................................................................................... 20

12. Survey Questions and Responses .................................................................. 30

13. Conclusion …………………………………………………………….. 32

15. Exhibit 1: BMW 3 Series monthly sales data………………………… 33

16. Exhibit 2: BMW Advertisement- Joy is life…………………………. 34

17. References ..................................................................................................... 35

2. Luxury Car Market in India

2.1 Luxury car majors in India

Cars from Bmw in India

6. PESTEL Analysis of BMW:

SWOT Analysis-BMW India

Strengths: Weakness Opportunities Threads

BMW in Maintenance cost is Leverage brand Environmental

8. Porter five forces analysis

Competition- Buyer Power-

1. Threat of new competition

2. Threat of substitute products or services

3. The bargaining power of buyers/customers

4. The amount of rivalry among competitors

5. The amount of bargaining power suppliers have

9.1 Segmentation strategy for BMW in India:

A. Segmentation of car market

Budget Car Segment

Compact Car Segment

Family Car Segment

Premium Car Segment

Super Luxury Saloon

S. Base Type Segmentation Explanation Segments

1 Geographic City Different tier of cities Tier 1, Tier2, Tier3, Metros

2 Demographic Age Different age groups  less than 18 years

Income and Different income levels  Earning less than 20 lacs

Gender Buying patterns vary a Male,Female

3 Psychographic Lifestyle Within the high income Usage oriented, Style

4 Behavioral Loyalty Status People with low or None, Medium, Strong,

S. No. Base Type Segmentation Segments Target Segment

1 Geographic City Tier 1, Tier2, Tier3, Metros Metros, Tier 1

2 Demographic Age  less than 18 years  18 years to 28 years

Gender Male, Female Male

3 Psychographic Lifestyle Usage oriented, Style Style oriented, Outlook

4 Behavioral Loyalty Status None, Medium, Strong, None, Medium

BMW Young/Medium Superior A product Comparable Better Extensive

Positioning Diagram for BMW: High Quality

Low Price High Price

10. Marketing Mix:

Features Special Design Features Benefits

Exterior Features • Halogen headlights with complex Superior looks, Attractive

Tires and Wheels • Alloy Wheels Robust tires, enables driving on

These all features are designed for target group

BMW X1 Rs. 22,61,879

BMW 3-Series Rs. 24,63,678

BMW 5-Series Rs. 37,91,967

BMW X3 Rs. 41,39,233

BMW X5 Rs. 55,25,867