Marketing Management: Luxembourg - Bmw Group

Marketing Management: Luxembourg

Professor Alfred Lowey-Ball

Assignment #2: Luxury Car Maker BMW

Student: Nikita Magin, BA2

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Table of Contents

BMW’s broadening product mix strategy. Is it wise?…………………….3

BMW’s strong competition in the “luxury car” sector…………………...4

BMW’s high profit margins………………………………………………5

References………………………………………………………………...6

What do think of BMW’s broadening product mix strategy—3-series, 1-

series, Mini—in light of their previous exclusive luxury car focus?

For the last decades BMW has been at the top in the car industry. The key aspect for the success of BMW is their wide range of cars. BMW cars refer to many people including from the upper to lower class customers. It is not surprising that BMW is wanted so much. Each of the cars in the series such as 1, 3, 5 and 7 as well as X (MINI) and other classes is different to drive and have different characteristics. [pic 2]

The product is one of key parts of BMW’ marketing mix program, distinguished by a high-tech content (the main strength of BMW). It is important to expand the range of products to reach the objectives, target segments, expand the line and develop more not harmful products.

BMW Group wishes an efficient look to their products and the main emphasis of BMW Group is on product development and innovation.

Key Product features in the marketing mix of BMW:

• Luxury segment
• High Quality products
• Excellent brand pull
• Good service

Is it wise?

Yes and no!

It is great to know that BMW Group has two other brands in its product range moving from the premium sector (Mini) to the luxury one (Rolls Royce), which would imply also a different range of competitors. The auto sector is a fast moving, and the competitive advantage is not inviolable to this environment. For this reason BMW cannot reckon on temporary advantages over competitors but should always aim to improve their competences.

It is important to consider that this strategy imply a risk in term of positioning; in fact, moving the brand reputation form the luxury segment to the average one could cause unpleasant consequences for the brand in term of perception and product sales. In order to soften this possibility the company should differ the two segments: 1) maintaining the scent of luxury brand for the premium products and 2) create a new label to brand the products designed to the lower market segment. Also for the company it is quite important not to lower the product in order to remain consistent with the philosophy of the group.