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What are Luxury Vehicles? Luxury vehicle is a marketing term for a vehicle that provides luxury pleasant or desirable features beyond strict necessity at increased expense The term suggests a vehicle with higher quality equipment, better performance, more precise construction, comfort, higher design, technologically innovative modern, or features that convey an image, brand, status, or prestige, or any other 'discretionary' feature or combination of them. The term is also broad, highly variable and relative. It is a perceptual, conditional and subjective attribute that may be understood differently by different people; "what may be luxury for one may be premium for another." In contemporary usage, the term may be applied to any vehicle type including sedan, coupe, hatchback, station wagon, and convertible body styles, as well as to minivans, crossovers, or sport utility vehicles and to any size vehicle, from small to largein any price range. Moreover, there is a convergence in the markets and a resulting confusion of luxury with high price: where there may have been a clear difference in price between luxury and others, there is no longer an absolute separation between premium and luxury, with what may be premium brands now more expensive than the equivalent so-called luxury ones. Automobile manufacturers market specific makes and models that are targeted at particular socioeconomic classes, and thus "social status came to be associated more with a particular vehicle than ownership of a car per se." Therefore, automakers differentiate among their product lines in "collusion" with the car-buying public. While a high price is the most frequent factor, it is "styling, engineering, and even public opinion which cars had the highest and lowest status associated with them." Every era in automobile history has had "a group of car marques and models that have been expensive to purchase, due to their alleged superiority of their design and engineering". Aimed at wealthy buyers, such automobiles might be generically be termed luxury cars." This term is also used for unique vehicles produced during "an era when luxury was individualistic consideration, and coachwork could be tailored to an owner like a bespoke suit." Although there is considerable literature about specific marques, there is a lack of systematic and scholarly work that "analyzes the luxury car phenomenon itself."
In a recent study of motor-industry executives from around the world by KPMG, those from rich countries said customers were scaling down to smaller, more efficient and greener models, whereas those from the BRIC countries reported that buyers wanted upmarket models. Even those who could not currently afford these seemed to be looking forward to the day when they would. Tatas supercheap Nano has not sold well because Indias first-time car buyers would rather wait than drive what they see as a poor mans car.
This lucrative market is hard to get into. Even Mercedes recently failed in its attempt to revive Maybach, a pre-war ultra-luxury brand. It took VWs Audi three decades of steady improvements and skilful marketing to reach its current level of desirability. Japans three biggest carmakers have put a lot of effort into creating premium brands of their ownToyota with Lexus, Nissan with Infiniti and Honda with Acurabut have yet to catch up with Europes most prestigious marques. KPMGs Mr Leech thinks they may do well with those Asian consumers on whom the finer points of German or British styling are lost, but McKinseys Mr Kaas is not so sure. Chinese consumers are developing Western tastes, he says, and value the long history and brand cachet of European luxury marques. Some of Europes struggling volume carmakers, such as Peugeot and Opel, are trying to move upmarket too in order to get back into the black. Russias president, Vladimir Putin, is calling for a revival of Sovietera luxury brands such as Zil and Chaika. Chinas new carmaker, Qoros, may also be aiming to establish itself as a premium brand. Mr Kaas says they all need to hurry up. Although brand loyalty in emerging markets is less strong than in the West, tastes are maturing and new luxury brands will find it ever harder to grab a share of the cake.
Identify potential and encouraging growth. Knowing what we represent. Recognizing where our strengths lie and making the best use of every opportunity. Goals we have attained are in essence the point of departure for new challenges. (www.bmwgroup.com) BMW Group mission statement is defined as to be the most successful premium manufacturer in the car industry.
The product is probably the cornerstone of BMW marketing mix programme, characterized by a high technological content it is definitely the main strength of the company. In order to reach the objectives it is important to expand the range of products already very wide targeting the entry-level segment expanding the line and developing more eco-friendly products such as hybrid luxury cars and compact city cars designed to the middle market.
Price:
Price for BMW should continue to be a consequence for the differentiation strategy; innovation, design and quality have a price. The brand should not lower the prices for premium and high-ended products despite the recent crises in some of the markets. At the same time should differentiate the price for entry-level product by creating special offers aimed at mid-market.
Place:
Exclusivity of the store is definitely a factor to leverage on for BMW; the company should continue to invest in the creation of flagship stores, so as to maximize the consumer experience. At the same time should also focus expanding the amount of authorized dealers, which are already present in more than 100 countries with more than 4.400 stores (Bmw group, 2012).
Promotion:
BMW is very committed in the promotion of its products, the company in fact invest large amount of money in product placement in movies such as The World Is Not Enough and others. New advertising techniques are largely used by the brand to enhance the design and quality of its products, however could probably be profitable for the company to focus on the environmental sustainability of its future products. In order to create awareness in the BRIC countries BMW should apply principles of global marketing to its advertisements, in order to shape them according to the countys culture. BMW has always been linked to exclusivity and luxury, but according to the new perspectives of German car maker, seems that the group wants to open the doors to the entry level segment of the market (Bmwgroup, 2012). For this reason, another important marketing objective should be orientated on creating product awareness for this particular sector in one-year time; this would work especially in the markets affected by the crisis in order to regain the lost sales. Without a correct implementation of this kind of strategy, there is in fact the possibility that the customer would not consider the possibility of buying BMW because perceived as too expensive for his budget. At the same time it is important for the company to not lower the perception of the main brand. BMW is finding increasingly interesting the concept of eco-friendly, and environmental sustainability car and way of transportation. The company since 2007 is involved in developing a new sustainable concept of mobility through hybrid and electric cars (bmwgroup, 2013). This can be seen and interpreted in two different ways and it can generate another two important future marketing objective for the company. The first one is product related; BMW will soon lunch in the market the new i3, a fully electric concept car equipped with an high technological content, capable of covering more than200 km on a single charge, and this demonstrates how the group is interested to embark on the road of environmental sustainability. Basically, producing eco-friendly vehicles should be set as a marketing objective bearing in mind the economic crisis, the increase in fuel and new laws in terms of pollution; this objective could be reached in four years time because of the already structured competencies of BMW. Another important example that confirms the theory comes from the New York Auto Show where the first ever four-cylinder diesel, has been presented in the US market from BMW (Autoblog,2013). As far as the for the and last marketing objective it presents itself as a result of the previous one; the group should increase awareness of its Eco sustainability in two year time, which would also give resonance to all the advanced technology achieved trough R&D investments
2) Weakness: There is an increasing number of duplicate spare parts of BMW and MINI Cooper. The manufacturing costs of BMW cars are very high as compared to its competitors. This is also a reason for high pricing of BMW cars. Not a mass market company like Toyota and their volumes are small. Uncertainty of Competitive Advantage Strong Competition in the Luxury Market
3) Opportunities: There is an opportunity for BMW Group to increase further innovation and technology in their cars due to increasing competition in car industry. BMW Group should also look to make new collaboration with other car manufacturers i.e. introducing new brands. BMW Group should also look to produce cheaper cars by new innovation and technology. Expansion of the BMW Group in Asia Pacific, Asia, Africa and Australia. Growing Demand for Hybrid and Electric Cars Scope of Growth in BRIC and UAE Markets.
4) Threats: Recession which has affected businesses in every part of the world. To maintain the same level of innovation and performance. The growing competition in the automobile industry i.e. competitors of BMW Group include Mercedes, Audi, Jaguar, Ford, Lexus. The earnings of the BMW Group are Dollar dominated, so the increasing strength of Euro is another threat for the company. Increase in Fuel Prices Currency Exchange Risk New Governments Regulations about Polluting Industries Economic Downturn in certain Assured Markets Strong competition in Global Markets
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Offline Strategy:
The BMW brand is highly attractive for people who have a modern view of things. It is perceived as a dynamic, sporty, innovative and aesthetic brand and hence has done well with the younger target audience. The average age of the BMW buyer is 40 years.
Therefore, instead of having a huge advertising budget they have developed their touch points to ensure a better connect of the customer to the brand. For Instance, BMW as brand symbolizes Luxury, therefore if you walk into any BMW store, you will be treated in a certain way and the store will be 11
designed to exude sophistication. BMW India was the first company to develop a luxury car dealership network in the country. Though in India, most of the luxury customers did not want to visit automobile showrooms, preferring instead for the vehicles to be shown to them at their homes / offices, BMW decided to open dealerships. The company set up showrooms that were of international standards. BMW also started BMW Studio in New Delhi, to provide the complete BMW experience to customers. BMW has also conducted activities such as professional golf tournaments, wine tasting sessions, events with fashion designers - that have helped them get closer to their customers.
Online Strategy:
With a majority of its target market being a younger generation, BMW has adopted to Social Media to access as much of its prospective customers as it can. BMW Indias Social Media strategy revolves around updates about BMW Indias offline activities and news. BMW Indias overall online cloud demonstrates that its online strategy is helping to enhance the efficiency of its overall PR strategy.
1) Facebook : BMW Indias Facebook page updates consist of interesting content around the brand like showroom launches, new models, offline events, awards, in-house news, etc. BMW being an aspiration brand, people would naturally want to talk about it, like it, share it with their friends, or even write about it But the updates on BMWs page are not interactive, hardly leaving any scope for conversation. A huge difference between the number of likes and comments clearly denotes this.
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Fans have been following and liking the brand, but there is very less engagement and conversation. To some extend this asserts its exclusivity.
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3) Youtube: BMW is doing a very good job on YouTube. BMW Indias YouTube channel is customized with rich with content. Videos depicting test drives, history of the brand, car launches, races, making of the car, etc. are lined up on its YouTube Channel that boast of over 3 lakh video views.
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terms of integrity. By the end of the decade Mercedes-Benz Cars strives to occupy the Number One position in the premium segment. On the way to achieving this goal, they want to sell more than 1.6 million cars of the Mercedes-Benz brand in 2015.
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2) Weaknesses: High Maintainence cost of Mercedes-Benz cars Lack of publicity in Social Media to target younger customers
3) Oppurtunities: Developing hybrid cars and fuel efficient cars for the future Tapping emerging markets across the world and building a global brand Fast growing luxury automobile market & increased income
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4) Threats: Government policies for the automobile sector across the world Ever increasing fuel prices Intense competition from global automobile brands
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racing circuit. Mercedes-Benz has a rich history of motorsport. In fact no other automobile manufacturer in the world shares the same relationship with racing as Mercedes-Benz.
Publishing a Magazine:
Mercedes-Benz announced its partnership with MaXposure Media Group to launch the Mercedes magazine for the first time in India. With up to eight existing international editions already, Mercedes magazine hit the Indian market through private circulation. Poised to serve as a coffee-table book, the magazine seeks to have considerable reach in the dynamic and young affluent sections of society. Published quarterly, the magazine will be circulated to the exclusive clientele of Mercedes-Benz in India and to the ever-growing group of people who aspire to be a part of the Mercedes-Benz family. Mercedes will cover topics ranging from high-end products and services to fashion, hobbies, holidays, and communication and entertainment. The magazine will also cover the global lifestyle of the rich and famous. Besides these, sections on Mercedes-Benz history, heritage, production and future technology have been incorporated for automobile aficionados. The international counterpart of this avant-garde magazine is published by Daimler AG.
2) Online Marketing:
Mercedes Benz listened to what customers were saying about them online before creating and implementing their social media strategy. Through this time of listening, they created a short list for a two year social media strategy. They also discovered, much like Mini did when they conducted similar listening, that their customers were drawn to Mercedes for the type of image and lifestyle that it portrayed, so that gave them a starting point for how to construct their media to best display the Mercedes lifestyle. The second objective Mercedes fulfills in their social media strategy is talking. Unlike other companies, Mercedes Benz has spent no money on digital advertising, including email campaigns . Instead of using this old style of one-way marketing, Mercedes talks to create conversations. They create these conversations through platforms like Twitter and Facebook. With this method, Mercedes talks to customers, but customers also talk to Mercedes. Over the last couple of years, Mercedes has launched several campaigns to engage customers through social media. They have an annual fashion week in New York City, but added a social media element to that for 2012. Through the Star Style Challenge, which has a special page on Mercedes Facebook fan page, people could answer the question what does ultimate star style look like on the red carpet at the Academy Awards by creating sets using fashions by featured fashion week designer Naeem Khan, and Mercedes-Benz cars. This reached out to a different set of people, fashion enthusiasts instead of car enthusiasts, but perpetuated the idea that Mercedes Benz is the best in glamour cars, as these sets paired world class fashion and the red carpet with their vehicles. Over 5,000 people entered the contest. In addition, Mercedes launched the Mercedes Benz Tweet Race in 2010, leading up to the 2011 Super 19
Bowl. In the race, Mercedes created cars powered entirely by tweets. The cars raced throughout the country, and the campaign led to thousands of tweets devoted to the race. The race was so popular that one of the team name hashtags actually became a trending topic on Twitter.
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segment the market into rural and urban areas. People who live in rural areas are more likely to buy a Audi A3 than a Audi A7. 2) Demographic segmentation: Age is a relevant demographic for car buyers. The very young and the very old do not drive, and in between, say, from ages 20-70, the choice of car will be partly influenced by the person's age. Take the Audi A6, for example. A 20 year old is more likely to choose this car than a 70 year old because it is more flashy. There's more to demographics than simply age, though, such as segmentation by gender. Are women more likely to buy certain Audi models than men? Are men more likely to buy certain Audi models than women? There's also segmentation by income. A person's income level is a major influence on their choice of car. A young man just starting his career, or an older man working in a low-paying job, might desire an Acura NSX, but at $89,000 U.S., neither could afford to buy it. Family status, whether a person is married and whether they have children, is also a demographic factor that influences their choice of car. 3) Psychographic Segmentation: When it comes to social class, Audi aims for Upper Middle Class to High class people, because it is a luxury brand. Peoples interest in various products can be determined by their lifestyles, and indeed people can often express their lifestyles through the goods that they consume like cars. Psychographic segmentation has demonstrated its use as a practical marketing tool in consumer markets.
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