marketing plan example

BMW AG

BMW AG

Marketing Plan

Robbie Johnson, Paul Vitale, Tim Lyons, Nathan Davis, and Laura Rusbarsky

Executive SummaryPlan Overview: We made sure to do the SWOT Analysis for BMW. Our strengths are our brand recognition and reputation for quality while our weaknesses are our high repair costs and vulnerability to currency fluctuation. Additionally, our opportunities are increased media attention on the 2012 Olympics and the BMW Championships golf tournament (both of which we sponsor) and our threats are the rising cost of fuel and the severe economic downturn.

We examined several trends affecting BMW and the car industry as a whole. Every automobile manufacturer must find ways to deal with increasingly demanding regulations on emissions and fuel economy from the EPA. Further, BMWs customers care about being cutting edge, so we must find ways to thoughtfully integrate the latest technologies (navigation system, Bluetooth, HD radio) into our cars.

In the end, we decided to select the Young Digerati as our target market. We selected this group because they are wealthy enough to afford the BMW 5 Series. Also, they care about technology, and the BMW 5 Series is very technologically advanced.

For our pricing strategy, we decided to use value-based pricing. Sure, BMWs arent a necessity, but that doesnt mean that our customers arent concerned with value. We need to make sure that our customers feel they are getting a lot of value from our products and that means providing the most luxurious and technologically advanced features possible.

To support our marketing plan, we did some research by referring to an informative article from Marketing Management by Suzanne Hader called Wooing Luxury Customers. In the article, she discusses many tips to getting luxury customers and keeping them happy. BMW can certainly apply each and every one of her ideas to make its business better and more profitable.

Plan Objectives:

Marketing: Increase market share of the midsize luxury sedan market by 3% by April 2013 Financial: Increase sales revenue from the BMW 5 Series by 5% by April 2013 Societal: Reduce carbon footprint by 5% by April 2013 Current Marketing SituationRESOURCES:

Human Resources: The BMW Group offers many benefits to its employees including flexible working hours and competitive wages. It strives to help its employees achieve a healthy balance between private life and work. Additionally, upper level management is very well qualified and experienced. For example, Frank-Peter Arndt, the head of production at the BMW Group, has been with the company for about twenty years.

Financial Resources: Based on the 2010 Annual Report, the BMW Group does have the financial strength to implement planned activities. 2010 was a highly successful financial year. The BMW Group achieved record revenue of euro 60,477 (19.3% higher than the previous year) as well as record earnings of euro 5,094 before interest and taxes.

Informational Resources: Yes, the BMW Group does have the data needed to understand its customers and the marketplace. It uses this information to reach its target audience of tech-savvy, young, urban professionals through advertisements on the Internet and television. In addition, the BMW Group spends a large amount of its marketing budget on product placement in James Bond movies such as Goldeneye and Tomorrow Never Dies.

Supply Resources: The BMW Group does have stable suppliers who are committed to the company. Also, manufacturing takes place quickly and flexibly because there is close cooperation between all of the plants. Currently, the BMW Group has 17 production facilities in six countries including Germany, Austria, Great Britain, South Africa, China, and the United States.

Offerings: The BMW Group consists of three different business interests: automobiles, motorcycles, and financial services. In the automobiles component, the company runs three separate brands: BMW, MINI, and Rolls-Royce. Furthermore, in the motorcycles component, the BMW Group has had great success with its strategy of building the best motorcycles, setting high standards with regard to technology, environmental protection and safety, and providing outstanding customer service in the pre- and after- sales phase. Last, but certainly not least, is the financial services component. This area provides the following services: financing and leasing, asset management, dealer financing and company car pools.

Previous Results: According to the 2010 Annual Report, the BMW Group has been doing extremely well thanks to the worldwide economic recovery. For instance, the company sold 1,461,166 BMW, MINI, and Rolls-Royce brand cars in 2010 (13.6% higher than the previous year). This is a good indication that the BMW Groups marketing efforts have been successful. Additionally, sales are expected to increase in the coming year partially due to strategic product placement in the new Mission Impossible film, which has been enormously profitable worldwide.

Market OverviewDEMOGRAPHICS

Singles who want this car should make approx. $125,000 per year based on a 5-year loan. He or she should spend up to 15% of income covering transportation costs (car loan, fuel, maintenance, etc.).

Families most likely need 2 cars. Under that rule (only one as our BMW model) the household net income will need to be $200,000 per year based on a 5 year loan. They should spend 10% of income covering transportation costs. This would leave a total of $32,500. Enough to buy another car and cover other transportation costs

Income

$125,000 per year or more

Marital status

Any

Household size Any

Education

Bachelor degree, MBA, PHD

Age

30-45

Gender

Any

Race

Any

Occupation

Manager or professional, technology specialist, Healthcare

Geographic

North America, Asia, & much of EuropeSWOT ANALYSIS

Strengths

1) Well Known Brand

2) Status Symbol

3) Quality

4) A lot of add-on optionsWeaknesses

1) Import Parts

2) Repair Costs

3) Change in currency; price fluctuation

4) Ecological/gas friendly

Opportunities

1) Increased media attention on Olympics

2) Increased media attention on BMW Championships

3) Globally recognized brand

4) Established brandThreats

1) Tariffs on shipping

2) Competitive Car Industry

3) Rising fuel costs

4) Severe economic downturn

Industry Analysis and Competitive (SWOT of two competitors)Audi A7

Strengths

5) Well Known Brand

6) Status Symbol

7) Quality

8) A lot of add on optionsWeaknesses

5) Import Parts

6) Repair Costs



Opportunities

5) Increased media attention on Audi through NY Yankees baseball sponsorship







9) The BMW 535 X-drive

Jaguar XF

Strengths

1) Well Known Brand

2) Status Symbol

3) Quality

4) A lot of add on optionsWeaknesses

1) Import Parts

2) Repair Costs



Opportunities







5) The BMW 535 X-drive

Product OverviewThe BMW 5 Series is available in two models: sedan and gran turismo. The gran turismo model is BMWs attempt to combine a car and an SUV. It resembles a tall, 4-door hatchback. As you might have guessed, the sedan model far outsells the gran turismo model. Regardless of which model you choose, there are 4 engine choices:

240 horsepower 2.0 liter 4-cylinder engine (528i)



301 horsepower ActiveHybrid 6-cylinder engine (ActiveHybrid 5; sedan only)

Further, the 5-Series is available in rear-wheel drive or all-wheel drive (X drive). Colors range from Alpine White to Jet Black. For the purpose of this project, we have decided to focus on a single good the BMW 535i X Drive.

Keys to Success and Critical IssuesKEYS TO SUCCESS

Brand Image: BMW is a well-known, worldwide company. They have made themselves into a status symbol with their pricey, well-made cars. They can be seen in many movies and international events, which helps boost BMWs popularity.

Safety: BMW is a safe car. It has an advanced brake system that monitors the way you are driving and all-wheel drive for inclement weather. Safety can be a make-it-or-break-it feature in some customers minds, so these safety features are vital.

In The Community: BMW is constantly doing well within the community. They help reduce waste by using innovative energy sources. They offer scholarships and fund a division of a university that teaches students about automotive research. BMW is also heavily involved in helping children through the Arts in South Carolina. All of this is important because customers want to do business with good people, ideally. Having a good image is crucial.

WARNING SIGNS

Laws: Over the years, laws will change and new laws will be made. BMW has to pay attention to new laws that directly affect what they are doing. For instance, if a law pertaining to fuel efficiency is created, BMW needs to make sure they are in compliance or else face big fines.

Bad economy/events: When the economy takes a hit or a major event happens somewhere in the world, chances are BMW will somehow be effected. If people change their buying behavior, BMW needs to subtly change their marketing to keep the customers that they currently have and lure more to them

Competitors: BMW should keep a watchful eye on their competitors. If, say, Lexus makes a car with all of the same features of a BMW, but offers it a lower price, BMW runs the chance of losing their potential customers to Lexus.Environmental Analysis Macro-Environmental FactorsSocial-Cultural Trends

-BMW adds new and cutting edge features that customers can benefit from-The company started with a quality product and uses consumer feedback to add or improve the car from year to year. Consumer reports are a great resource to use because it takes feedback directly from the consumer and it can be easily attained by the manufacturer.TECHNOLOGICAL TRENDS bmw.com

-New features in car(s)

iPod and USB adaptor

audio system with auto store technology

HD radio

BMW Assist Safety Plan with Bluetooth

-How car interacts with new technology such as smart phones

USB adaptor for music

Bluetooth

smart phone apps

roadside assistance

GPS

Unlock car in case of lock outECONOMIC ANALYSIS

North America: Economy recovering from recession could be near a top

Europe: Economy 9-months behind Americas economy. Not a good time to be investing in marketing luxury items just yet.

Asia: Economy is bottomed out and may be a good time to invest. Skill sets are rising in China and demand for higher pay is increasing. The more workers are paid, the more they will spend.

Fuel costs are risingCost of insurance is getting higher

Encourage the marketing plan to consist of a 5-year (60-month) loan or a 3-year (36-month) lease to reduce buyer long-term commitments and increase company profits.ECOLOGICAL ANALYSIS

Fuel shortages are inevitable, but unlikely in the immediate future

Manufacturing pollution laws are becoming more stringentEmissions laws

Need to increase miles per gallon, hybrid, plug-in option try to avoid horsepower reduction

Green energy considerationsPOLITICAL AND LEGAL TRENDS

EPA fuel economy is improving for the BMW 5 Series City - 19

Highway 29

Micro-Environmental FactorsSuppliers could directly influence our marketing strategy in a number of ways. First of all, if there is a shortage of raw materials, our suppliers might be unable to produce the items we buy from them to add to the car. Perhaps it is the plastic molding for the trim of the bumpers. There is no way we would ever sell a car that was not 100% built and we would not heavily and financially promote car sales if we couldnt keep up with demand. We would have to delay the introduction of the strategy a few weeks or months so that our suppliers could catch up. Supply management might want to consider alternatives. There could be a worker strike that seizes production. Tornados, tsunamis, earthquakes, and the breakout of war could also impact production.

Channel Members could certainly impact the way the customer centers receive the cars. Channel members mainly consist of transportation forms from where the car is put together to the sales lot. Luckily, there is not really a distributorship and the primary storage facility is located on each sales lot in front of public view. There could certainly still be delays in shipping as well as at customs. Since BMW cars are made overseas, each car sent to the US gets loaded onto a ship and transported. Each car must go through customs, which is not a channel member but more of a hurdle to cross. Inclement weather, natural disasters, war, a truck-jacking, and breakdowns could also impact the delivery dates of the cars to the sales lots. Unfortunately, it would be too late to postpone the strategy implementation if many of these issues occurred. Plus, some of these issues may only impact one sales lot or just a small portion of their inventory for a limited time.

BUSINESS RELATIONSHIPS

Design Relationships

Design Works USA is a leading company in design strategy and development. They have been working with companies for 35 years and were acquired by BMW AG in 1995. Ever since they have been working with BMW on new and innovative designs for BMWs vehicles. BMW has enjoyed a loyal customer base and produced quality vehicles.

Financial Relationships

Liberty Mutual is an insurance company that works with companies and individuals around the United States. They provide quality insurance. BMW is working with Liberty Mutual offering insurance programs to BMWs customer base. Additionally, BMW Bank of North America is based out of Utah. They work with BMW to provide their customer base with lease and financing packages for when they purchase a BMW vehicle. They offer credit lines and credit cards to customers that have bought a new or pre-owned vehicle.COMPETITOR ANALYSIS

Essentially any vehicle is a competitor because the number 1 reason to buy is to travel.

Compare and contrast themselves to other car companies

Lexus, Audi, Mercedes-Benz, JaguarMost specific competitors include:

2012 Audi A7

2012 Jaguar XFThe 2012 Jaguar XF runs about $1800 cheaper, base price. It gets 16 mpg in the city (5 less than BWM) and 23 mpg on the highway (7 less than BMW). BMW is obviously the GREEN CHOICE, which gives us an upper hand on the competition.

2012 Audi A7 costs $4,400 more on average at the base price. It gets 18 mpg in the city (3 less than BWM) and 28 mpg on the highway (2 less than BMW). Both cars have about the same mileage per gallon, but BMW is still slightly more fuel-efficient and saves a few dollars at the pump.

BMW lacks slightly with horsepower, in comparison to its biggest competitors. BMW 535 x-drive has 300 horsepower which is a very powerful car. Audis A7 has 310 horsepower which really isnt noticeable. Jaguar, however, has 385 horsepower which is significantly more. That is also what is causing the Jaguar to get poor mileage. Our eye on the market leads us to believe our customers want a fast car, one that can pass other cars quickly when desired, but that is also eco-friendly and safe for traveling with the whole family.

The BMW and the Jaguar seat 5 persons where the Audi only seats 4. BMW also provides more comfort space overall than the competition. This means that our car, the BMW, is designed to fit you and your family comfortably. Further, Jaguar beats BMW and Audi in the matter of having some additional standard equipment including a DVD player and a navigation system. We offer those items as upgrades. Moreover, BMW happens to weigh more, but has better fuel economy funny how better technology prevails. In addition, our BMW is shorter in length and is also narrower in width so it makes it easier to park, especially in smaller parking spaces. This will also help protect/prevent your car from others unintentional door dings and butt bumps. All the other equipment listed are pretty much standard between all 3 cars.Customers: The customers who buy from our competitors generally do so due to the price of the Jaguar XF, the extra horsepower of the Audi A7, or brand familiarity. When people are happy with the purchase of their first luxury car, they will generally purchase their second luxury car from that same company. If they had breakdowns, issues with warranty, or issues with customer service, they will consider different alternatives. Those who buy from our competitors are generally thin, healthy people (Not that our customers arent healthy). We believe that they exercise more, eat healthier, and fit snug into the seats of our competitors. They also must be either short or like sitting next to the steering wheel because those cars have much less leg room.

Competitive Strategy: Our competitors competitive strategies are very similar to our strategy primarily because they sell luxury cars as well. However, they design cars with smaller interiors, which are comfortable as long as their customer is thin. Their strategy promotes smart choices, healthier life styles (which directly relates to their customers), safer cars, and safer for the environment. Their strategy is sound as long as it is not compared next to ours.

Marketing StrategyMission: The mission statement up to the year 2020 is clearly defined: the BMW Group is the worlds leading provider of premium products and premium services for individual mobility.CONCENTRATED MARKETING PLAN

For this marketing plan, we will use a concentrated marketing coverage plan. We chose this plan because we are only using one segment and we believe choosing one strategy to target that market will be the most beneficial. The concentrated marketing plan identifies the most attractive segment and focuses all its marketing on that segment. This will allow BMW to sell the selected car to the target market that would be the most likely to buy. While other markets are important too, it is vital to select a target market that we know will buy such an up-and-coming product. While the undifferentiated and differentiated marketing coverage plans would also work, they wouldnt target the key BMW customers and potential customers like the concentrated marketing plan would.PLAN OBJECTIVES

1. Marketing: Increase market share of the midsize luxury sedan market by 3% by April 2013

2. Financial: Increase sales revenue from the BMW 5-Series by 5% by April 2013

3. Societal: Reduce carbon footprint by 5% by April 2013Determining Marketing Plan Direction = Growth Strategies

Branching out sales to India and introducing the X1

http://www.articlesbase.com/cars-articles/bmws-growth-strategy-for-india-bmw-x1-to-be-launched-in-india-3330298.htmlSetting Marketing Plan Objectives = Financial Objectives

http://www.bmwgroup.com/e/0_0_www_bmwgroup_com/investor_relations/ir_services/reden_praesentationen/_pdf/InvestorPresent_May_2011.pdf http://www.autoblog.com/2007/09/27/bmw-plans-for-future-2-million-by-2020-new-models-and-fourth-b/Planning Marketing Support = Customer Service

customer service numbers available for every country onlineTARGET MARKETOverview of Possible Segments and Niches

1. Blue Blood Estates

a. Description: People in the Blue Blood Estates segment are wealthy and older with kids. They have million-dollar homes, manicured lawns, and high-end cars. They are the nations second-wealthiest segment in the United States, earning six-figure incomes. The total number of U.S. households in this segment is 1,131,860 (0.97%), and the median household income is $126,538 (2010 statistics). Lifestyle traits include: shopping at Thomasville, playing tennis, reading Architectural Digest, and watching video-on-demand.

b. Geography: We have decided that people in the Blue Blood Estates segment tend to live on the west coast in cities like Los Angeles, Seattle, Las Vegas, San Francisco, and San Diego.

c. Viability: Blue Blood Estates is a viable market because the people in this segment are wealthy enough to afford the BMW 5-Series. Also, they have children, so they are more likely to choose the 5-Series sedan over a less practical coupe or convertible. Additionally, they care about image and status, and the BMW 5-Series is a status symbol.

2. Young Digerati

a. Description: People in the Young Digerati segment are a wealthy and younger family mix. They are tech-savvy, affluent, highly educated, and ethnically mixed. They tend to live in fashionable neighborhoods on the urban fringe with trendy apartments and condos, fitness clubs and clothing boutiques, and casual restaurants and bars. The total number of U.S. households in this segment is 1,403,157 (1.21%), and the median household income is $91,104 (2010 statistics). Lifestyle traits include: ordering from expedia.com, going water skiing, reading The Economist, and watching the Independent Film Channel.

b. Geography: We have decided that people in the Young Digerati segment tend to live on the east coast in cities like Boston, Washington, D.C., New York City, and Miami.

c. Viability: Young Digerati is a viable market segment because the people in this segment are wealthy enough to afford the BMW 5-Series. Further, they live in a trendy neighborhood, so they need a trendy car like the BMW 5-Series. Moreover, they are tech-savvy, so they would enjoy all the infotainment options like the premium stereo and the navigation system.

3. New Empty Nests

a. Description: People in the New Empty Nests segment are upper mid-mature without kids. They have grown-up children recently out of the house. They are upper-middle income older Americans with active and activist lifestyles and no interest in a rest-home retirement. This is the top-ranked segment for all-inclusive travel packages, and their favorite destination is Europe. The total number of U.S. households in this segment is 1,243,807 (1.07%), and the median household income is $75,295 (2010 statistics). Lifestyle traits include: shopping at Bloomingdales, attending opera performances, reading Tennis, and watching The News Hour with Jim Lehrer.

b. Geography: We have decided that people in the New Empty Nests segment tend to live in the Midwest and the south in cities like Chicago, St. Louis, Austin, Dallas, and Houston.

c. Viability: New Empty Nests is a viable market segment because the people in this segment have more disposable income now that their kids are out of the house. In addition, many of them are recently retired with money to spend on themselves.Select the Market

Young Digerati: We have decided to select the Young Digerati as our target market for several reasons. First of all, they are wealthy enough to afford the BMW 5-Series. Also, they care about technology, and the BMW 5-Series is very technologically advanced. Furthermore, they care about image and status, and the car is a hip, trendy status symbol. Lastly, we want to get customers while they are young, so they will become lifelong BMW customers. Hopefully, the Young Digerati will purchase pricier BMW cars like the 6 Series and 7 Series as they age.PERSONA

Meet Jason. Jason has just moved to Boston, MA, to take a position with a prestigious IT/marketing company. He snagged this job because of his successes in IT and web-based media in his last job and his recently obtained masters degree. He just bought a newly renovated condo with his wife of two years right outside of the city. They are expecting their first child in six months. Jason and his wife picked this area to live in because its not only a short commute to both of their workplaces, but it is very close to trendy restaurants, bars, and designer boutiques. Jason is very tech-savvy. He always has the latest and greatest gadgets from the newest iPhone to the best entertainment center. Before they decided to settle down, Jason and his wife loved going water skiing and scuba diving. They live their lives on the edge and think of themselves as trendy and affluent.With a baby on the way and a new job, Jason needs a safe yet impressive car. He is looking for something techy, but also for something that exceeds his expectations in safety specs.

YOUNG DEGERATI- DEMOGRAPHIC VARIABLES

Young Digerati are tech-savvy and live in fashionable neighborhoods on the urban fringe. Affluent, highly educated, and ethnically mixed, Young Digerati communities are typically filled with trendy apartments and condos, fitness clubs and clothing boutiques, casual restaurants and all types of bars--from juice to coffee to microbrew.

US Households:1,403,157(1.21%)

Median HHIncome:$91,104

Lifestyle Traits

Order from expedia.com

Go water skiing

Read The Economist

Watch Independent Film Channel

AudiA3

Urbanicity:

Urban

Income:

Wealthy

Income Producing Assets:

High

Age Ranges:

25-44

Presence of Kids:

Family Mix

Homeownership:

Mix, Owners

Employment Levels:

Management

Education Levels:

Graduate Plus

Ethnic Diversity:

White, Asian, Hispanic, Mix

GEOGRAPHIC VARIABLES

Location:

Country: United States of America

Region: East Coast

States: Massachusetts, New York, New Jersey, Washington D.C., Pennsylvania, Virginia, West Virginia, North Carolina, South Carolina, Georgia, Florida, Texas

Cities: All major cities inside specified states

Climate: Cloudy and wet, cold and snowy. This car will be fun, comfortable,

and safe in any climate and on any road conditions.

PSYCHOGRAPHIC VARIABLES

Lifestyle: Full time employee, full time dad. Very active lifestyle

Activities: often attends sporting events, opera and theater, business parties, networking events. Active in community and church, coaches kids sports

Interests: Driving, Reading, stock trading, attending plays and sporting events, watching CNBC and ESPN, exercising often, eating at fine restaurants, and drinking only the best import red wine

BEHAVIORAL AND ATTUDINAL VARIABLES

Benefits perceived: horsepower, great fuel economy, high technology, luxury, high comfort, and status through brand.

Rate of usage: Drive everywhere to work, the kids schools and sports, groceries, church, dinner, parties, date night, short family trips. Drive Often, Drive Proud.

User Status: Powerful, important, upper-class, demands respect, someone to know

Loyalty status: buy once, buy for life

Attitude towards product/service: Will rave and promote car and the fact of ownership. Owners free and unsolicited praise will sell more cars.

Technological orientation: customers will want the best a BMW. BMW will offer the best; most advanced technology in cars including increased fuel economy, collision impact safety devices, seat comfort design with heating and cooling, music and sound, engine and sound, transmission shifting and options, and hundreds of extra accessories that could make their car fit their every need.

Price sensitivity: Not the cheapest car line, but not our most expensive car line either. Our customers are willing to pay more for perceived personal status. They want status, prestige, luxury, reliability, and everything else that is associated with our brand. In a poor economy, our customers are more price-sensitive. However, new (non-target) customers of previously more expensive models may be more willing to settle for buying this model in economic downturn because it costs less than their current cars, has mostly the same technology but, most of all, because it IS still a BMW.POSITIONING FOR COMPETITIVE ADVANTAGE

Use advertising in ways that keep BMW a household name

Commercials, billboards, magazine ads

Sponsor high profile events

Olympics and BMW Championships Promote the new and exciting features of our own cars opposed to highlighting the downside of other cars

Meaningful Differentiation

Affordable luxury

Attainable status symbol

Quality/dependable product

Positioning and Marketing Leverage

BMW College Graduate Financing Plan

Allows recent college graduates to get lower interest rates as well as opt out of the safety deposit when leasing

Promotes younger ambitious individuals to buy BMW, hopefully creating new lifelong customers

www.bmw.northamerica.comAn alternative to the Hyundai Assurance Plan. Instead of targeting people who may face unforeseen financial problems in the future, they are targeting young adults with a college degree, a higher paying job than before, and a bright future.STRATEGY SUMMARY

Direction: Our marketing strategy will involve national advertising, special events, and promotions to entice new and existing customers to visit our stores or booths at special events. If we can get our audience to come in and meet our staff, sit in our car, and test drive it, they will surely want to buy it.Goals: Our goal is to maintain our high standards with regard to technology, environmental protection and safety, and providing outstanding customer service in the pre- and after- sales phase. We will continue to maintain brand loyalty among current BMW owners, minimizing migration to competitive brands.

Objectives: Our objectives are to increase market share of the midsize luxury sedan market by 3% by April 2013, increase sales revenue from the BMW 535 x-drive sales by 5% by April 2013, and reduce our carbon footprint by 5% by April 2013. Our goal is to sell this car at a competitive price, with technologically advanced electronics and increased fuel mileage without sacrificing horsepower.ASSESSING AND TARGETING SEGMENTS

Segment Evaluation

1. Market Factors: The size of the market is sufficient (1,403,157 U.S. households in 2010) and larger than the New Empty Nests and Blue Blood Estates segments. Likewise, there is a potential for growth as the segment ages. Our hope is that they will purchase larger and pricier BMWs as they near retirement. Similarly, the price elasticity is a bit lower because its a luxury good. The wealthy arent as affected by recessions.

2. Economical & Technological Factors: There are fairly large margins on luxury automobiles. Also, BMW will need to be careful that it doesnt go overboard with the technology. In the past, the company has tended to make it too complicated. The detested iDrive, basically a nob on the center console used to control many of the cars different systems through a screen, is a good example.

3. Competitive Factors: The competition in the segment is intense, but not as intense as the full-size, luxury sedan market that the BMW 5 Series older brother, the 7 Series, competes in. Cars like the Mercedes Benz S-Class and the Audi A8 dominate that market. Similarly, the BMW 5-Series has a sufficient degree of differentiation. It has an effective combination of sportiness, luxurious features, and safety (airbags, stability control, available all wheel drive). The BMW 5 Series is the ultimate driving machine as opposed to Lexus, which aims for comfort and isolation instead of sportiness.

4. Business Environment Factors: Economic fluctuations must be taken into account. We are currently in recession, which softens demand for luxury goods a bit. Additionally, the U.S. government imposes strict CAFE (corporate average fuel economy) standards, so BMW may have to spend extra money to make sure the 5 Series is fuel efficient enough to meet the federal regulations. Finally, there are all kinds of safety requirements, so extensive crash testing must be conducted.Marketing MixPRODUCT FEATURES, BENEFITS, AND SERVICESEPA Fuel Economy: City: 19 21 Highway: 29 31

Available Engines: 300-hp, 3.0-liter I-6 (premium)

Available Transmissions: 6-speed manual w/OD, 8-speed automatic w/OD and auto-manualThe selected BMW also has many available features in handling & control and comfort & convenience. See Appendix 1 for a complete listing. QUALITY AND DESIGNWe asked our customers what they wanted and from the results plus market research, we made the perfect car. This car was designed based on the needs of our customers. It has better fuel mileage than the similar sedans of our close competitors and it still has all the power you would expect a BMW to bring. Being a family, yet professional car, it seats five, has lots of head and shoulder room and leg space for all 5 occupants. The features have advanced technology as well as the long list of extra options buyers can choose from. This car also comes in very sleek colors that really accent the curves. Above all, the car has a very high safety rating so our customers know they are protected. The warranty on this car is also exceptional. All these features bring an emotional quality.Our service is also part of our product. As customers shop or their cars are in for maintenance, they are pampered with free lattes and hors dourves. We also provide free Wi-Fi so they can stay busy with work if they need to. Our sales professionals are courteous and will be able to share the most complete information about the car and features as well as all our BMW line. This car is a representation of our brand. Staying within a certain expectation is essential for marketing this car. We wont be advertising this car in a bathroom advertisement; we will be doing event sponsorships with the Olympics and advertising with free test drives at specific trade shows. We will promote the product only in the most professional manner, because after all, our customers are professionals within their line of work and in their life as a father/parent.Although our car is a 5-person sedan, it still looks like a BMW with the sleek curves, the accenting paint color options, and actually has an extra little sporty look to it. Very eye friendly. It is one of those cars people see on the road as wow, I want that car. The design of the interior is sleek also. The transmission shifter is a customized new design that takes much less space. There are no more keys to fiddle with, just a button, and the front bucket seats allow you to sink in and get fully comfortable.

PACKAGING AND LABELINGThis one is a bit tricky because a car is different than say a breakfast cereal when it comes to packaging and labeling. However, even though the BMW 5-Series does not come in a cardboard box, the design of the car could be considered the packaging. After all, there are certain design elements such as the logo and front grille that distinguish the 5-Series from competitors and communicate BMWs brand. Additionally, the stickers on the driver side window informing the potential buyer of the fuel economy, options, and price of the car might qualify as labeling. For instance, BMW would certainly be able to make the stickers more appealing to the buyer by drawing attention to all the wonderful options the car has rather than the price.BRANDING AND POSITIONINGBMW has evolved its brand positioning. In case you havent noticed their most recent advertising, the brand is now espousing the Joy that comes from owning and driving a BMW, while stepping away from the brands well known focus on driving power and performance, famously captured in the slogan The Ultimate Driving Machine.

The Power of Brand Equity

BMW implemented a program in recent years targeting recent college graduates. This programs allows people who fall into this category to purchase a BMW 535 at a lower interest rate, lower lease payments, or $0 down payment.

Once they have purchased their first BMW at a young age, the company then offers the customer their Ultimate Service Plan.The goal is to provide customers with the best possible car experience from purchase to all repairs ensuring that they will be repeat customer for life.PRICINGBMW could be either dynamic or negotiated pricing depending on the sales person. Dynamic because the car can fluctuate between prices or negotiated because the buyer and seller can come up with a reasonable price for both parties.VALUE BASED PRICINGBMW is definitely a value-based product brand. Cost can be an issue if it is priced unrealistically against the cars of close competition, but overall most of our customers are not concerned with price as a contribution factor. BMWs are luxury cars and are elastic expenses. But when the economy is weak, our car becomes a hot pick as a secondary choice for BMW customers who buy the higher luxury cars. BMW customers are not only purchasing their car due to legroom, high technology, and comfort nor just for the reasons of high horsepower and great fuel mileage. They are buying BMWs because of the brand name and the quality and reliability the brand name stands for.EXTERNAL PRICING1. Customers: Since it is perceived as a luxury automobile, BMW customers are willing to pay around $60,000 for a 5-Series. However, if BMW decided to increase the price of the 5-Series to $90,000, the company would most likely lose some customers because $90,000 is beyond the acceptable range for that type of product. For $90,000, BMW customers expect to buy the larger 7 Series.

2. Competitors: Regarding the BMW 5 Series, its main competitors are the Audi A6 and the Mercedes-Benz E-Class. As a result, BMW must ensure that the 5 Series has a similar price.

3. Legal, Regulatory, and Ethical Concerns: In addition to applicable laws and regulations, BMW should consider the ethical dilemmas in pricing. For instance, what are BMWs ethical responsibilities regarding full disclosure of prices for upkeep, updates, or replacement parts?INTERNAL PRICING

1. Product Strategy: If sales of the Audi A6 increase dramatically, BMW could lower the price of the 5-Series to defend its market share.

PRICING ADAPTATIONSSegment Pricing

BMW uses segment pricing in their pricing strategy by offering programs for recent college graduates. With a recent degree or diploma and a letter from a current or future employer, graduates that qualify can receive the best pricing and financial offers that BMW has. This is particularly good for the demographic chosen because of their young age. Many may have already graduated from college, but many more may be going to law school or going back to get their Masters. BMW wants to hook a younger market so they can be life-long customers. By helping graduates, they are making that possible.Discounts

BMW offers several different discounts depending on what and how the customer is purchasing. For example, in a lease, BMW offers a $1,500 dollar credit and a reduced interest rate of 2.9% for 36 months. Leasing, especially starting out, is a good idea for a young person like those in the target demographic. BMW offers discounts because, to a buyer, it is enticing. A good deal has the potential to persuade a customer to choose BMW over, say, Mercedes-Benz.PromotionsAlthough the manufacturers themselves do not usually have promotions available, the dealerships where the customer will purchase the vehicle will. They may range from trade in promotions to free service for buying a new BMW.Online Presence

The Internet has dramatically changed the car market because of the ability to compare different cars within different price ranges to see which is more compatible for the consumer. Also, websites like cars.com can include all the features you want in your car and how it compares to the competitor. Having the ability to car shop online in your home is a lot more convenient than going to a dealership and walking around.1) BMW is a brand known for their quality and craftsmanship. As a well-established luxury car company, their pricing system would be considered inelastic. Instead of raising and lowering pricing based on the economy or gas prices, they simply offer more. Ensuring that their vehicles have higher MPG ratings, as well as offering the customers extended warranty plans. These give consumers a bonus, or an extra reason, to choose BMW over their competitors.

2) With the use of the Internet, consumers have the opportunity to get a feel for each car manufactured by BMW before they set foot into a dealership. If they would like to, they even have the option of customizing their new car from the comfort of their home, giving consumers ultimate control.

The Internet also allows potential consumers to research cars they may be interested in, discovering any potential flaws as well as any concerns or disappointments current car owners my have with the product. In order to keep buyers happy and the demand for their product high, customer service is a must. Happy customers will have positive things to say, luring others in to make a purchase as well

Other Channels

The car dealers play the final role so-to-speak. The car dealers have several important roles:

1. They make the cars easily available to the public

2. The sales persons are experts in providing information about the vehicles features to the customers and enabling qualified customers to test drive our vehicles

3. The sales people are part of the information highway; they provide knowledge from BMW corporate to the customer and they relay customer feedback back to BMW corporate (360* feedback). This way BMW will continue to build cars that fit the customers needs.

4. They keep inventory accessible to the public in all available color combinations and other styles/features and product placement featuring specific cars to increase sales in the show room.

5. Aside from the cars quality fulfilling the needs of our customers, our sales staff and hospitality (hors dourves, lattes, and free Wi-Fi) will welcome customers to open their hearts (and wallets) to BMW.

6. In the event there are service or warranty work, the dealerships also provide the repair and maintenance work. The mechanics are professionals at fixing these cars and they make managing service work simple.

7. The dealerships will also allow customers to borrow cars while their car is being worked on. If they do not have a BMW for customers to borrow, they will transport them to an un-named rental car company and will pay for a luxury car for their customers, not the standard cheap car like their competitors do. Our customers have spoken. We have listened and will always listen.

There are 17,725 new car dealers currently in the United States, 338 of which are owned by BMW. Of the total car dealers in the United States, only 4% (709) of them sell BMWs even if they are not owned by BMW. This helps us expand our car sales into other markets without investing capital. For example, our marketing plan is to sell our cars in major cities like Chicago and Los Angeles. If a car dealer in Lake Ozark is willing to sell our car, we are willing to sell it to them at a competitive rate. BMW will not own a dealership there so we will have no capital investment outside of our target audience.

(http://www.autoblog.com/2011/08/25/number-of-u-s-car-dealer-rises-for-first-time-in-a-decade/)

Used car dealerships are likely to buy and sell any brand that they can afford. Having used BMWs at as many dealerships as we can is best for maximum exposure. It is out of our hands at that point, but we still need consumers to buy used BMWs so that our prime customers can upgrade to newer models.ServiceAt BMW, we want to make sure our customers have the best experience possible when they bring their car in for service. We will work with our dealers to make sure the customer lounge is well equipped with bottled water, orange juice, soda, coffee, fresh fruit, pretzels, and free Wi-Fi. We want our customers to feel like they can still be productive while they wait for their cars. Additionally, as mentioned above, we will always try to provide a loaner BMW if one is needed. We refuse to loan a non-luxury car like a Toyota Camry. Our customers deserve a first-class experience.Internal MarketingInternal marketing is all about marketing to your managers and employees. It is important to make sure everyone within the organization is on board with the new marketing plan. The marketing team cant implement the marketing plan alone. Many different departments are involved, and they all must work together to make the marketing plan a reality. Through internal newsletters, Web pages, training, and marketing meetings, we will ensure every employee understands the objectives and goals of our new marketing plan. We also want to keep the communication channels open, so those working on the frontlines can tell senior management if the marketing plan is working or not. Employee feedback is one important metric we can use to measure the success of the marketing plan.

Marketing ResearchReference Information:

Hader, Suzanne. Wooing Luxury Customers. Marketing Management 17.4 (2008): 27-31. Business Source Premier. Web. 14 Apr. 2012.

Article Summary:

The challenge luxury brands face is finding ways to provide a luxurious customer experience at every juncture. Here are some guidelines for doing it right:

Whenever possible, use market research and psychographic and ethnographic profiling to pinpoint your target customers and understand why they buy. Luxury customers want to feel like the brand is speaking to them alone, so know your audience better than your competition.

Aim for brand engagement and sales will follow. Luxury customers are wary of being sold to, so offer rich experiences that wrap the purchase in an emotional connection based on shared values like privacy and quality.

Hire people who already have a heart for service, then train and empower them to act on behalf of your brand. For example, Ralph Laurens sales staff is empowered to make split second decisions to make the customer happy without having to check with a manager.

The brand may be what piques the luxury consumers attention, but its the service that forges and solidifies the bond. The bond, and the high degree of trust that goes with it, is the reason why luxury consumers are willing to pay so much more.

Develop programs to reengage dormant and ex-customers. The luxury population is so small that its often easier and cheaper to woo back a former customer than to engage a new one.

Embrace online commerce-now. Luxury consumers are ready and willing to spend large sums of money online, so develop a website that makes it quick and easy to shop.

BMW would do well to implement every one of these strategies especially the one about service solidifying the bond between the consumer and the brand. Since buying a car often involves many trips back to the dealer for maintenance, we want to make sure our service is top notch. That way the consumer will be more likely to buy more BMW cars in the future.

FinancialsThe information below was found on census.gov.

SALES REVENUE FORCAST

Total Potential Market 48,794,937 x .33 = 16,102,329

Total Available Market16,102,329 x .75 = 12,076,746

Sales Forecast in Units12,076,746 x .179 = 2,161,737 cars

Sales Forecast in Dollars2,161,737 x $54,800 = $118,463,187,600MARKETING EXPENSE BUDGETBudget--4,554 million Euro. Up from 4,020 million Euro in 2010Net Profit/Loss 2011 (Automobiles Only)--4,991 million EuroBREAKEVEN ANALYSIS

Costs and Breakeven: Costs typically establish the theoretical floor of the pricing range, the lowest price at which the organization will avoid losing money. For planning purposes, youll need to know your costs and how to calculate the break-even point the sales level at which revenue covers cost. The total costs of a product consists of fixed costs overhead expenses such as rent and payroll, which do not vary with volume plus variable costs expenses such as raw materials, which do vary with volume. Since I was unable to locate the exact numbers, here is my best guess on the break-even analysis:

Average Per-Unit Revenue: $54,800

Average Per-Unit Variable Cost: $40,000

Estimated Fixed Costs: $100,000,000

Units Breakeven: 6,757

Sales Breakeven: $370,270,270

PROFIT AND LOSS ANALYSIS -4,991 million Euro for 2011ControlsIMPLEMENTATIONTo implement a marketing plan effectively, BMW has to own the plan, support it and adapt it when needed. Being able to measure the company and get feedback is so crucial when putting together the marketing plan along with producing new products in the future.Successful Implementation of a marketing plan:Owning the plan

Detailed Action plans

Compensation

Management Involved

Work force and management teams

Supporting the Plan

Time to succeed

Resource allocation

Communication

Required skills and machinery

Adapting to the plan

Continuous Improvement

Innovation

Feedback Measurements

Persistence

Adaptive Roll outMARKETING ORGANIZATIONSince BMW is an international organization, they strive to have excellent international management skills. Although they have a more hierarchical structure, like shown in the image below, BMW strives to communicate with all levels of the company to really let everyone know their mission and vision for BMW.

http://www.bmwmoa.org/club/about_the_bmw_moa/operations/operations_overviewCONTINGENCY PLANNINGContingency plans are something a marketing plan can fall back on. If there were a major disaster within the company or some harm has been done to the company than they have contingency plans as a back-up.

BMW is so well known worldwide that even if a disaster were to occur in one country they have another market to fall back on. The BMW 535i x-drive can be a substitute for another one of BMWs luxury sedans and they have another automobile that can take its position.APPENDIX 1

Handling and Control

ABS & driveline traction control

Stability control

Front double wishbone suspension

Front anti-roll bar

Coil front springs

Gas-pressurized front shocks

Multi-link rear suspension

Rear anti-roll bar

Coil rear springs

Gas-pressurized rear shocks

Rack & pinion steering

Steering cooler

4-wheel disc brakes

Front and rear vented disc brakes

18.0 " silver aluminum wheels

P245/45VR18.0BSW run flat AS tires

Design and Dimensions

Body-colored front and rear bumpers

Chrome grille

Clearcoat monotone paint

Maximum Cargo Volume 14.0 cu.ft.

Exterior Length 193.1 "

Exterior Width 73.2 "

Exterior Height 57.6 "

Wheelbase 117 "

Front Tread 63 "

Rear Tread 64 "

Turning Radius 19.6 ' turning radius

Payload 1,058 lbs. payload

Front Legroom 41.4 "

Rear Legroom 36.1 "

Front Headroom 40.5 "

Rear Headroom 38.3 "

Front Shoulder Room 58.3 "

Rear Shoulder Room 56.2 "

Interior Cargo Volume 14.0 cu.ft.

Comfort and Convenience

4 doors

Express open/close sunroof

Dual heated mirrors, driver power remote mirrors, passenger power remote w/tilt down mirror

Dual illuminated visor vanity mirrors

Auto-dimming day-night rearview mirror

Seating capacity of 5

Front bucket seats

Power adjustable front head restraints

Center front armrest

(8-way power) driver seat

(8-way power) front passenger seat

Rear bench seats

Adjustable rear head restraints

Center with pass-thru rear armrests

Driver seat memory

Leather front seat trim

Leatherette door trim insert

Full cloth headliner

Carpet floor trim

Carpeted front & rear floor mats

Genuine wood/metal-look instrument panel insert

Leather/metal-look gear shift knob

Lighted glove box

Dome light w/fade

Front & rear reading lights

Full floor console

Front and rear cupholders

Covered bin instrument panel storage

2 seatback storage pockets

Console refrigerated/cooled box

Dual door bins

Rear door bins

Cargo concealed storage

Carpeted cargo floor trim

Carpet trunk lid/rear cargo door trim

Cargo tie downs

Cargo light

Dual zone front air conditioning

Automatic air conditioning

Rear HVAC with separate controls

Air filter

Underseat ducts

Automatic air recirculation

AM/FM/HD/Satellite-capable, seek-scan

Radio steering wheel controls

Single in-dash mounted CD

MP3 decoder

12 speakers

Amplifier

Graphic equalizer Radio theft deterrent

Window grid diversity antenna

Cruise control with steering wheel controls

Power with 2 stage unlock door locks

Keyfob (all doors) remote keyless entry

Power trunk/hatch/door release

Rear child safety door locks

Fuel filler door release included with powerdoors

4 12V DC power outlets Driver foot rest

Retained accessory power

Ashtray

Wireless phone connectivity

Tachometer

Engine temperature gauge

In-dash clock

Exterior temperature

Systems monitor

Trip computer

Trip odometer

1 1st row LCD monitor

Power telescopic tilt steering wheel

Leather steering wheel

Power front windows

Power rear windows

Front and rear 1-touch down

Light tinted windows

Variable intermittent front windshield wipers

Heated front windshield jets

Rain detecting wipers

Speed sensitive wipers

Rear defrosterReferences

"Market Segmentation. Market Segmentation Research. Marketing Segmentation. Market Segment Research. Prizm from Claritas." Prizm Market Segmentation, Market Segmentation Research, Market Segment Research, Market Segments, Consumer Market Segments, Customer Segmentation. Web. 16 Apr. 2012. .

"New 2012 BMW 5-Series 535i XDrive Sedan Competitor Pricing Comparisons." New 2012 BMW 5-Series 535i XDrive Sedan Competitor Pricing Comparison. Web. 16 Apr. 2012. .

"Number of U.S. Car Dealer Rises for First Time in a Decade." Autoblog. Web. 16 Apr. 2012. .

"US Census Bureau." Census Bureau Homepage. Web. 16 Apr. 2012. .

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wooing luxury customers

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