Week 4 Price and Channel Strategy

AN UNDERSTANDING OF THE TARGET MARKETS 6

BMW

Introduction

As the BMW Group (n.d.) highlighted, the origin of BMW trickles back Karl Rapp and Gustav Otto. In the year 1916, there was the merging of Flugmaschinenfabrik Gustav Otto Company to Bayerische Flugzeug-Werke (BFW) at government behest. Relatively, in the year 1917, the Rapp Motorenwerke had evolved to Bayerische Motoren Werke (BMW) GmbH before becoming an AG; Public Limited Company in the year 1918 (BMW Group, n.d.).

The Product Life Cycle

The Living Media (2017) highlighted that this cycle has four stages.

The Introduction Stage

The source observed that this is the most expensive stage of a company that seeks to introduce a new product and BMW is no exception. Before starting off this stage, it is worth determining the needs of the consumers to come up with a product that satisfies such desires. The Automotive Intelligence (2007) notified that in the efforts to ensure that there are no mistakes made in the introduction stage, BMW had even set a location; Engineering Centre (FIZ) in Munich which serves as a location for all people brought together for the purpose of developing a product, suppliers included. It is a requirement to determine the characteristics of the target market.

Demographic characteristics

Abougomahh (2005) stated that the demographic characteristics are the reflection of the elements such as the size of the population as well as its features. These characteristics of the population may stand for the age, marital status and the education of the particular target market (Abougomahh 2005). In manufacturing a vehicle, BMW must take cognizance of these aspects concerning the market they target. Nica (2013) informed that the BMW's i8 targeted the consumers who were mostly men and of the age of 35 years old. On the other hand, if targeting families, there would be a replication of the same in the design of a vehicle.

Psychographic Segmentation

Lamb, Hair, ad McDaniel, (2009) opined that these characteristics stand for the aspects touching on the personalities, motives and even the lifestyles of the consumers. It is worth highlighting that when it comes to BMW, there is the reflection of the same with regards to the designs of their products. Getting back to the BMW's i8 the same vehicle targets the individuals who are tech-savvy; not only like to enjoy the experience of driving but also express caution concerning the responsible driving (Nica, 2013).

The analysis of the psychographic and the demographic aspects help in the better understanding of the consumer needs and the replication of the same in the modeled designs of vehicles.

The Growth Stage

In this stage, one thing that stands out is that there is the aspect of the growth in the sales and the same on profits. The Living Better Media (2017) highlighted that the reason behind this growth is the ability of the company in question to consider economies of scale in production resulting in the profit margins. In the case of BMW, Stark (2016) highlighted that in less than a decade, there was the doubling of the sales posted by BMW.

Maturity Stage

In this stage, there is the establishment of the product, and the company in question aims at the maintenance of the created market share (Living Better Media, 2017). Kaser (2013) highlighted that there are no strategies for all stages of the product cycle on the part of BMW and the firm had eliminated the maturity stage in their product cycle.

Decline Stage

In this stage, one thing that stands out is the shrink in the market of the product as a result of the market saturation owing to an increase in competition. With the decline in sales and relatively in profits, the choice that BMW has for this stage is the removal of the product from the market (Kaser 2013).

Product and Promotion

It is worth highlighting that BMW is a globally known company. In most case, consumers have a softer spot for the widely known firms and their products. However, to ensure that there is the replication of the desire of association in the sales and profit margins, there is the need to ensure a personal touch with the consumers. The best mode of promotion would be the direct marketing. This technique would entail the marketing of the BMW product through visual, audio and print medias that the consumer has a direct contact with such as the radios, televisions, and newspapers. It would also be crucial to use other methods such as the emails and personal messages to the existing customers.

Positioning Strategy

The strategy shall be in such a manner that it touches on at least one aspect of the target market in such a manner that it upholds differentiation from the other offerings in the market. One aspect is the use of the family while making adverts for the newly introduced BMW products, as family is an important element of societies.

Public Relations

There shall be the offering of customer service at BMW the importance it deserves. Relatively, the addressing of the complaints shall be prompt and at the convenience of the consumer. The measure of how successful the method is would be through the reflection in the sales and profit margins.

References

Abougomaah, N. H. (2005). Marketing: Arab and foreign perspectives. Al-Horria: Arab Administrative Development Organization

Automotive Intelligence, (2007). "BMW: Product Development." Retrieved from http://www.autointell-news.com/european_companies/BMW/bmw-engineering/fiz.htm. Accessed on 26/6/2017

BMW Group. "Establishment of BMW." Retrieved from https://www.bmwgroup.com/en/company.html. Accessed on 26/6/2017

Kaser, K., & South-Western Cengage Learning. (2013). Advertising & sales promotion. Mason, OH: South-Western Cengage Learning

Lamb, C. W., Hair, J. F., & McDaniel, C. D. (2009). Essentials of marketing. Mason, Ohio: South-Western

Living Better Media, (2017). "Product Life Cycle Stages." Retrieved from http://productlifecyclestages.com/. Accessed on 26/6/2017

Nica G., (2013). "BMW's i8 Now has a Target Demographic." Retrieved from https://www.autoevolution.com/news/bmws-i8-now-has-a-target-demographic-64839.html. Accessed on 26/6/2017

Stark, J. (2016). Product lifecycle management: Volume 2.