BMWs Marketing Techniques - Case Study Example

Italian brands lost 1.46% while foreign brands lost 1.30%. Italian brands (the dominant Fiat Auto Spa) claimed 28.04% of the market share and manufactured four out of every ten best selling cars. The main international brands included-GM (Opel and Chevrolet), Ford (Ford+Mazda+Land Rover+ Volvo), Volkswagen (Volkswagen+Audi+Skoda).The fiscal burden on the ownership of cars is a stark reality. In 2003, the Government hiked taxes on luxury cars and sports utility vehicles in a bid to reduce the deficit budget and control pollution.

Vehicles weighing more than 2600 kilos were subject to higher taxes.Porter's Generic StrategyThe chief components of the generic strategy are-cost leadership, differentiation, and market segmentation. It is advocated that a combination of market segmentation strategy with product differentiation and cost leadership strategy can prove effective for a firm. Following is a brief examination of the main ideas entailed in three strategies.Cost Leadership StrategyThis strategy emphasizes the production of high volume standardized products.

The product is often a basic no-frills commodity that is produced at a relatively low cost and is made available to a very large customer base. Successful implementation of this strategy depends on upon-tight cost controls, incentives based on quantitative targets, sustained access to inexpensive labor. Differentiation Strategy"Differentiation" entails, making a product perceived as unique. The unique features of the product should be communicated to the customers. The price elasticity, in this case, tends to be low and customers develop 'brand loyalty'.

It also affords insulation from competition.Segmentation StrategyIn this case, the focus on select target markets. It is also known as the focus strategy or niche strategy. Here it is assumed, that by focusing marketing efforts on a narrow market segment and tailoring the marketing mix according to those specialized markets, a firm can be successful.Fiat's restructuring strategy cannot be exclusively classified under any one of the above classifications. Its restructuring plan entails elements of all three strategies.

For instance, The Company has been involved in a major cost-cutting exercise which has enabled its "price leadership" in the automobile sector. The new Fiat 500 project has seen development costs halved due to its collaboration with Ford. Production costs are likely to plummet since production will take place in its Tychy plant in Poland. Following the pioneering model of French Automaker Peugeot, Fiat aims to keep the new models flowing at the lowest possible development cost. Negotiations were underway with Tata's in India and SAIC in China for strategic alliances, which will help, the Company keeps a lid on costs.

The Company recovering from a tarnished brand image cannot resort to 'differentiation' very successfully especially during the recovery stages. However, marketing efforts at Fiat have been revamped. Fresh marketing technique shave been adopted under the restructuring plan. "Style" and the "I like it" factor were the key elements for the consumers' decision of buying the Grand Punto. The Company has also resorted to the internet as a marketing medium. The remake of the 1960's minicar is being highlighted on the net, this strategy resembles BMW's marketing techniques.