Brand Audit for BMW - Essay Example

? Brand Audit Report Affiliation with more information about affiliation, research grants, conflict of interest and how to contact Brand Audit REPORT for BMW Brand Inventory: Background of the brand: Bayerische Motoren Werke AG (BMW) was an international company which placed an important role in the luxury part of the U.S. automotive market. It had significantly rebounded from all the setbacks as done by its competitors such as- Acura, Lexus and Infiniti during the period of middle to late 1980’s. BMW is a German based company of motorcycles, automobiles and aircraft Engines. The origins of BMW trace back to 1913 when a Bavarian named Karl Rapp started an aircraft-engine shop in Munich called Rapp Motoren Werke. The company focused in airplane engines though Rapp reported that at the beginning stages it was quite difficult and they suffered from extreme vibration. In 1917 Rapp resigned from the industry and it was then guided by an Austrian engineer Franz-Josef Popp, who altered its name to Bayerische Motoren Werke. That same year, the chief engineer Max Friz also planned the industry’s first aircraft engine, the six-cylinder Type III, which was formed due to the strong demand for the engines of BMW. When the1919 agreement of Versailles had forbidden any German companies from making aircraft engines, BMW then switched to creating air brakes for the railway cars. In 1923 Friz developed the industry’s first motorcycle, the R32, a model that held globally as speedy proceedings for all motorcycles throughout the 1930’s. In 1928 the industry entered into the automobile field by obtaining Fahrzeugwerke Eisenach, a creator of small time based cars in Eisenach, Germany. “In the 1930s BMW began producing a line of larger touring cars and sports cars, introducing its highly successful model-the 328 sports car-in 1936” (Military Motorcycles, Part 2: WWII and BMW, 2012). In 1945, the Allied forces dismantled industries major factories. Moreover, BMW had finished making garden and kitchen tools and also it had introduced a novel, low-priced motorcycle to the German market in 1948. The industries returned to the automobile manufacturing in the 1950s and it resulted in low sales. In the 1960s the industry twisted its fortunes by concentrating only on the compact touring cars and sports sedans, and then it began to fight with Mercedes-Benz for the markets in the United States and Europe. “BMW's U.S. sales peaked in 1986 but then dropped steeply, partly due to competition from two new luxury cars-Lexus, made by Toyota Motor Corporation, and Infiniti, made by Nissan Motor Co., Ltd. The 1989 collapse of the Berlin Wall led to a boom in car sales in Europe, and in 1992 BMW outsold Mercedes-Benz in Europe for the first time” (BMW Car Logo History, 2009, par.5). Another company that poses a major threat to BMW through its stiff competitiveness is Billabong. BMW also faces challenges from various independent firms presenting their own performance model type cars as opposed to the models of BMW. A number of performance enhancement tools and features may be added to these cars that are basically based on those manufactured by BMW. The independent firms indentified to be involved with manufacturing performance enhanced cars include Alpina, Dinan Cars, Hamann Motorsport, Hartge and AC Schnitzer. In 1990 BMW created a business with the British aerospace firm Rolls-Royce PLC to create aircraft engines for its business jets. In the year 1992 BMW broke the ground by planting the automobile factory in Spartanburg, South Carolina, though its initial automobile planting was done in US. In 1994 BMW obtained 80% of the shares in Rover Group, a British producer of luxury cars, small cars and Land Rover sport utility vehicles from the British Aerospace PLC. Brand attributes: Brand attributes are a group of characteristics that recognize the character, physical traits of brands, like the attributes that permit us to consistently recognize persons. At BMW, the brand attributes are important in every business operation. The company strives to transport the similar business understanding irrespective of when and where the customers meet. Cars manufactured in Japan, Korea or US, brand attributes are always seen as benefits. On the other hand, when evaluating the two brands with each other in terms of luxury, quality brand attributes are simply considered as table stakes. They just symbolize what is probable and the real separation comes from the strong attributes. Passion for Customers: Most of the success has directly come from the consumers and it’s the need to understand their industry and answering the need for the transport as and when the need arises. “BMW Dealership has the best and cheapest prices on pre-owned used cars, suvs, and pickups in Somerset County, NJ” (A Passion for Perfection, 2013, par.1). Dedication to Service Delivery:  Customers constantly recognize that they rely on bringing high quality solutions. This could be clearly seen from the information about the company as being rated as one of the highest customer maintenance. “Quality, efficiency and innovation: the three cornerstones of the vehicle-maintenance expertise delivered by BMW Service - today and tomorrow” (BMW Service, n.d, par.1). Even before a novel BMW model enters into manufacturing, the engineers quite conveniently focuses on developing an innovative driver based feature car which ensures that all BMW automobiles are able to do its best throughout the year. Brand Portfolio: A Brand Portfolio is utilized to control the dealings between every sub and co brands in a strategic method to aid in the growth, enhancement and the maintenance of building a brand. It is used to expand directionality for the industry and for its brands. It clarifies the brand to target market and encouraging all its workers to work in a synergistic method of developing the brand. The total set of brands that an industry applies to its services or products. Every brand in an industry brand portfolio may be registered in the appropriate trademark laws and may symbolize a precious benefit to a business that is frequently quite active in promoting the probable customers. “When businesses try to run each of their brands completely separate from one another, confusion and inefficiency can prevail. In contrast, by utilizing a brand portfolio, the business is able to focus on the big picture, causing resources to be better allocated to where they can do the most good, thus creating the most value, and reducing unnecessary overlap” (Robertson, 2013, par.3). Too many industries determine that BMW’s portfolio includes too many brands, the effects of which may range from incompetence and confusion to paralysis in controlling the portfolio. An over branded portfolio can result in planned brands to lose markets and its equity position for the reason that the marginal brands are engrossing in building dollars and even worse for the managerial aptitude. Managers basically follow an instinct to explain the issues even before they start to exploit the chances and also they take a lot of marginal brands which creates a host of issues. Brand Elements: BMW uses the majority of brand elements in creating its brand image. Evaluation of the brand elements helps the company in creating brand equity which reveals that the name is quite simple and easy to memorize. The BMW’s logo is very easy to remember as it’s done with blue and white colors. The slogan is the major important element due to its significance. In the strict framework, packaging as a brand element doesn’t apply to the cars as they are not sold without any irrelevant packaging or a defensive material. “A case can be made many consider the automotive body as a form of packaging surrounding occupants. As packaging, the body is also significant since looks are quite important to consumers in this market” (Maguire, n.d, p.6). BMW’s brand element contains six criteria. They are- memorability, meaningfulness, likeability, transferability, adaptability and protectability. Memorability: “Brand elements should inherently be memorable and attention and attention--getting, and therefore facilitate getting, and therefore facilitate recall or recognition” (Brand Elements, n.d, par.3). The Memorability of BMW is strong. It is important for the reason that normally it uses the name that contains of three letters. Its simplicity helps in deciding the expansion of brand name of the particular product by the purchasing power. Meaningfulness: Brand elements should be able to explain the category of products; it resides in and together, involves a key differentiating attributes and benefits. “Brand elements may take on all kinds of meaning” (Jacob et al. 2011, p.141). The brand element of meaningfulness is reinforced as BMW is an abbreviation of the company to keep its name. BMW is a leading brand as well as considered to be one of the best car manufacturing companies of the world. In this modern era, BMW not only manufactures a variety of luxury cars doused with top notch features but also different types of formula one cars that completely define the driving and off-road sporting experience. Furthermore BMW manufactures a number of bikes that are packed with a lot of potential for performance and provide both a means to travel as well as the ultimate stunting experience. Likeability: The Company is not only recognized but measured somewhat which is estimable and concerned with their consumers also. “Independent of the particular product, the brand elements should be verbally and visually likeable” (Chitale, 2001, p.237). Part of this can be an outcome of the brand elements. BMW’s logo is common with most individual’s perception of US. Following picture represents the logo of BMW (BMW Logo, 2010, par.1). Transferability: The transferability of the company connects luxury car division with the motorbike, or any additional divisions of the group of BMW. “Transferability relates to the extent to which the brand element can be extended to different products, categories, or geographic markets” (Brand Elements and Programs, n.d, par.2). Evaluating the sale of the various types which has a greater or an equal market share of the extra customary models, the transferability will be confirmed. Adaptability: BMW’s past element adaptability may be considered by the sales more precisely due to its past market share. “Adaptability deals with how brand elements could be adapted to changing times, with regard to competition and consumer preferences” (Brand Elements, n.d, par.1). The company present adaptability and it can be enhanced by measuring the past market share. Protectability: It is enforceable for the reason that any other 3 letter name which is similar to it will be making a clear effort as to violating the trademark of BMW. Marketing mix: The marketing mix means the variables that a marketing manager may manage to influence a market share or brand’s sales. Usually, these variables are contained as mainly the four P’s of marketing that are- product, place, price and promotion. “A mixture of several ideas and plans followed by a marketing representative to promote a particular product or brand is called marketing mix” (Marketing Mix-Meaning and its Elements, 2008, par.1). BMW utilizes the aftermarket marketing to make it stronger in their appeal to potential consumers and strengthening the existing consumer’s loyalty that may be acquired for every associates of the family. Furthermore, aftermarket tools are being offered that contains internet based services and onboard navigation. The different aftermarket products also contain phones and TV’s as an extra development which gives the driver knowledge and also providing a sheer driving pleasure. Product: To maintain its position globally in the technical heads of vehicles. Many changes are being brought in bringing imaginative ideas into innovations and are fairly necessary in creating significance for BMW to handle the pulse of every market and to identify the early trends and reacting quickly with the suitable solutions. “A firm’s product line or lines refers to the assortment of similar things that the firm holds” (The Marketing Mix: Product, 1999, par.2). The BMW products assist in making brand equity by differentiating BMW during the support for a smooth ride. The point of equality is that any car may obtain as to where it’s going. Other than with a BMW, we find the style. The company’s product is an elevated performance on luxury car that appeals to each individual with middle to high profits. It stands for status, quality and prestige. BMW also creates motorcycles. The product differentiation in the car section plays a significant role for BMW, with technical novelties and new car types coming up on a normal basis. BMW has attracted probable consumers from various demographic groups. Since cars are rather similar in their looks and functions, BMW to insert particular features and new patterns to their product lines by creating their cars which are impossible to differentiate. The BMW brand is connected with convinced characteristics, which are prestige, performance and good engineering in cars. These features are unbreakable with the publicity and product differentiation in sustaining a loyal customer base and attempts in maintaining them from switching to another brand. The marketing communication strategy adopted by the specialists at BMW includes both direct and indirect communication. The goal of these communication media is to provide information with as much details and depth as possible to potential customers all around the world, regarding the brand, its products as well as services. It also promotes marketing communication goals with respect to the brand values, product attributes, brand heritage and also the BMW ownership experience. Price: Price is the next part of the marketing Mix. It is defined as the quantity of money which a consumer would have to pay for a particular product. “There are wide varieties of pricing strategies available to firms” (The Marketing Mix: Price, 2009). The pricing strategy of BMW is value pricing and prestige. BMW takes huge pride in the information that they would never lower the cost in the car market. BMW doesn’t cost their cars on what they price, other than that upon the perception of consumers. When the consumer looks at every benefits of buying a BMW there is the awareness that the price inquired is a fair trade. They utilize the opinion of prestige pricing to induce the consumer that they will be in the best position to have brought a BMW. So, the BMW buyers are not essentially driven by cost. They desire the understanding of the brand promise, which are safety, performance, innovation and technology. Price helps to construct the brand equity for BMW by involving that a top price equals high quality. BMW is costing their cars at the higher end of the price choice, and consumers are willing to pay provided that they get a chance to own a brand like BMW. The company is priced at the higher end spectrum to ensure that the relations of high-class and luxury are not weak. Nowadays, BMW has more and more become a brand that is reasonable for an increasing target group. Place: “The organization must distribute the product to the user at the right place at the right time” (Marketing Mix: Place, n.d) presently, BMW is following a customary retail strategy. The BMW group is producing in the United States during a network of about 340 sports activity vehicle and about 148 motorcycle traders. Promotion: BMW’s promotion strategies reproduce the brand image. In addition, the company tries to appeal to segments other than the traditional male consumer by introducing female connected advertisements in publications for instance vogue. This promotional plan has also assisted in making the brand equity stronger and reinforces connections for the company as the producer of higher performance cars with fashionable patterns and luxuries interior. Brand Exploratory Customer Knowledge: Customers may select a BMW on the basis of their trust with respect to the quality of BMW products and also on the basis of the image which the brand has created. The main objective of marketing is to please the consumer. The concept of consumer satisfaction has been publicly accepted by the Corporations. Sometimes this concept may receive less attention. Many successful Corporations have become victorious mainly because they have attracted the customers by providing superior products and superior services. Customer knowledge and satisfaction are often the reason because of which the customers of car manufacturers have a tendency to replace their vehicle by the latest model or version provided by the same manufacturer. In order to make sure of customer satisfaction, the level of customer satisfaction has to be monitored from time to time. “Firms need to systematically support customer knowledge distribution across departments and across geographies based on their specific needs. Specific organizational roles can be created to this end” (Prandelli et al.2008, p.61). The BMW has been developed to a learning organization. It has provided learning opportunities to the production teams. It has encouraged its associates in sharing and acquiring knowledge by means of training and development. Thereby the employees will contribute to the procedure of change and they capitalize on the opportunities and keep up to date. In the early stages of production suppliers are engaged in order to ensure continuous production. By this method, the production costs are minimized and the designs are optimized. There is an electronic data network link which promotes learning and allows BMW associates and suppliers to exchange ideas. This helps the suppliers to improve their own processes. This is a small step which helps in capturing knowledge and information and makes it available more widely. The BMW effected reorganization in order to make an effective use of customer knowledge which it absorbs by the Web. It created a function which is known as customer prospect relationship management which is responsible for both pro-active marketing strategies and customer relationship management. The Web is intensively utilized in order to absorb customer inputs and for the profile users to build up customized commercial initiatives. Interactive mini-websites are sometimes created in order to maintain the commencement of specific new products. The content which is developed online by the customers through their interactions in independent communities and the company’s websites which is impulsively created by the users is methodically analyzed by precise roles within the CPRM and later distributed in a selective manner to individual departments as per the contingent needs. The department of marketing will have to pay considerable concerns to the feedback that comes in the Web from the customers who are innovative and the feedback is later verified on more representative samples of the customers by making use of traditional market research tools. Sources of Brand Equity: The source of brand equity is said to be in the actions and minds of the consumers. It is the value which is an outcome of their decisions that is whether to buy a particular brand or not to buy a particular brand. It can be said that when the relationship between the brand and the source of income is stronger, the brand asset becomes more valuable. Therefore, it has become necessary that the managers of particular brands have a thorough knowledge of the outcome and also of the source. “The indirect approach to building brand equity is referred by Keller (2003) to as leveraging secondary brand knowledge for a brand. By making a connection between the brand and another entity, consumers may form a mental association from the brand to an entity, and to any associations, judgments, feelings, and the like linked to that entity” (Maguire, 2004, p.9). Financial people might have a difficulty to accept that the value of brands will exist in the consumer memory. This can be named as the soft data. The accountants are not satisfied with the “soft “data. They normally change their mind with regard to this especially when they remember the fate of Arthur Andersen, which was one of the big accounting firms. It was famous with partners and had offices in different parts of the world. It was a trusted firm which was quite professional. Later on the Enron fraud was disclosed and the firm was made connected to the said scandal. The clients around the world had to review their relationships. The partners were finally forced to close the firm. Hence, it was not the financial failure which closed the firm; it was the loss of confidence from the part of the people. The reputation of the firm was destroyed by the activities of a single office. Reputation will reside in the memory of the general public. It was not the hard data that caused the collapse of the highly respectable firm but the soft perceptions. So the source of brand equity resides in the minds of the people that are in the human memory. Therefore the brand managers should have a good understanding of the method in which the information enters the minds of the people. “When the concept of brand equity was discussed at the MSI conferences in the late 1980s and early 1990s, the consensus was that there are two types of brand equity. Financial brand equity is of value to the company because the brand is treated as an asset. Consumer based brand equity is of value to the consumer because the brand adds utility in their lives” (Strydom et al. 2007, p.263). Threats to Brand Equity: In the recent decades, competitive pressures on BMW have increased markedly. Therefore, the organizations are always changing because of the powerful entities that are coming into the international level. The European Union is one of the best examples since the multinational corporations have increasingly dominated particular sectors as that of cars. New competitions have emerged and are forcing the older companies to reform or adopt to survive. “SWOT (strengths, weaknesses, opportunities, threats) risk is the risk that the share will be less than expected because the company fails to align its strengths with the market opportunities and to manage its weaknesses in the face of market threats” (McDonald et al. 2007, p.105). The methods in which the human resources are managed are affected by the different structures. “BMW like all other businesses require the same basic human resources activities like recruitment, development and training, appraisal and reward systems, and control and feedback mechanisms” (Organization, Analysis and Policy, 2005, par.8). The BMW faces threat from the new entrants. The confidence of the customers and the high capital expenditure will represent the main barriers to entry and the market may also become sensitive to reputation. On the other hand, the entry of low cost manufacturers has posed a major threat. The other threat is from the substitutes because the model of premium branded cars are being made. The other threat is the bargaining power of the customers. For both the BMW and also the entire automobile industry, there is a large number of different suppliers and therefore, there is an aggressive pricing strategy. “Detroit's rigid and bloated bureaucracies are slow to respond to competitive threats and market trends, while BMW's management structure is flat, flexible, entrepreneurial -- and fast” (BMW’s Dream Factory, 2006, par.3). Recommendations: There is a rapid increase in the rivalry from other car producers in all the segments. Mercedes is the major competitor and there are others like Volvo, Volkswagen etc. The competitors are introducing new products day by day in order to have a greater pie of the customer’s mind and on the market share. The scenarios and trends are constantly being changed in the consumer market. The lifestyles of the people have changed. There must be differentiation and individualization between lifestyles and products. BMW has to keep this in mind and build up products. For example, BMW can attract moderate and middle culture families by introducing more less priced and fuel efficient variants. “As already noted from an economic point of view, the BMW Region is a grouping of very different areas with widely divergent potentials and growth prospects” (Future Prospects and Recommendations, n.d, par.2). Market wants products with simple interaction and excellent networking. Environmental sensitivity of the customers is increasing. Environment has become a contest factor. However, BMW has taken the necessary steps in order to protect the environment. But there is a need to develop vehicles that use renewable energy.BMW has to extend product leadership with respect to quality, driving experience and design. Long term customer relationship has to be created. “Everyone makes mistakes from time to time, even machines. In building cars, what is important is to recognize these before production begins and to correct them” (BMW Group, n.d). In order to build stronger brand equity the company can sell articles like t-shirts with BMW logo. Also, a good corporate culture has to be created along with good products. Reference List A Passion for Perfection. (2013). Bridgewater. Retrieved from Chitale, A.K. (2001). Product Policy and Brand Management. Product Policy and Brand Management. Retrieved from BMW Car Logo History. (2009). Retrieved from BMW Service. (n.d). BMW.com. Retrieved from Brand Elements. (n.d). Transtutors.com. Retrieved from Brand Elements and Programs. (n.d). Safari Books. Online. Retrieved from Brand Elements. (n.d). 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