Customization Program at BMW - Essay Example

HERE HERE YOUR HERE HERE BMW Case Analysis PRODUCT OR EXPERIENCE? It seems to depend on whether the is from the United States or other countries that determines whether it is a product or experience they are purchasing. For instance, the case study illustrated that American consumers want everything quickly, including customized vehicle options, therefore U.S. customers seem to be buying a product more than an experience. In Europe, consumers are willing to wait for delivery to ensure they are getting top quality vehicles and there seems to have been a very positive response to the customization program at BMW. European customers, therefore, appear to be patient wanting a total holistic experience that comes along with the brand reputation of makers such as BMW. There is a great deal of marketing being undertaken, especially in promotion, by many different automakers that provide very similar vehicles with similar characteristics. American automakers provide mid-sized cars at affordable prices, but must rely on lifestyle marketing (psychographics) in order to get consumers to see differentiation between cars with very similar benefits and features. In this case, the automakers themselves are attempting to sell an experience, however the buyer is likely looking for a reliable and affordable vehicle, making them more focused on the product and pricing instead. Again, it seems to be a matter of the country of origin where the consumer is located that determines exactly what the customer is looking for when seeking out new automobiles. Those that are affected by automaker promotions illustrating actors with similar lifestyle qualities, such as Subaru with their recent family-centric marketing, would probably consider buying a Subaru to be a total brand experience. A consumer with moderate financial resources that is looking for only an affordable vehicle that will be dependable would be seeking out just a product purchase that is aligned with their current resource availability. It really seems to depend on the type of consumer, their cultural capital such as values and beliefs, which determines whether it is a product or an experience they are seeking. Under the assumption that most cars share similar characteristics, it is highly dependent on the consumer profile that will determine what, specifically, the buyer is looking for when considering different auto brands. THE DRIVERS OF CAR-BUYING DECISION-MAKING There are many factors that influence the decision to purchase an automobile. Marketing theory informs that many customers look toward reference groups when making certain product-buying decisions. Reference groups are important figures in a person’s life, such as a trusted family member or even celebrities, as a means of justifying their identity. Some consumers are so concerned about the opinion of others in their social environment that many of their decisions are based on the word-of-mouth or general sentiment of reference groups. A person in the working class, as one example, might witness one of their neighbors with moderate income levels driving a very expensive car and getting a great deal of attention for the flash of their purchase decision. Wanting to experience the same social attention, the individual might decide that their current vehicle is not satisfactory and begin exploring higher-priced alternatives. There are many consumers that make purchasing decisions based on their social environment and this seems to have a great deal to do with why consumers seek a new vehicle. Even the case study supports this notion, illustrating how BMW found success through product placement in a James Bond movie when the car was shown with a futuristic-looking cellular phone. The film industry now becomes a reference group for consumers which is why advertisers seek product placement to gain a psychological connection with buyers and motivate a desire to make a purchase. The automakers, also, make it difficult for an individual to be satisfied with their current vehicle models. Automakers shift production to include new exterior features and technological changes that make, for instance, a 2008 model completely different than a 2013. Now, the customer has an outdated car model, even though it is fairly new, and the notion of keeping up with the proverbial Joneses now becomes a critical factor driving their decision-making to seek a new model. The tactical production of the automakers, in many consumer markets, drives the choice to require a new automobile. THE DREAM IT, BUILD IT PROGRAM The Dream it, build it program was moderately flawed. Even the case study indicated that there were some concerns that executives at BMW were over-estimating the impatience perspective when considering American buyers. BMW radically changed its operational strategies to ensure that customers would be buying a whole experience and not just a brand, which costs capital resources. Women were selected as the target market for these vehicles, using advertisements in women’s magazines and also associating the brand with Martha Stewart. There are many other buyer segments in society that would appreciate a customized product experience and it seems that BMW was being too selective about which markets to target their promotions to. Furthermore, not all consumers are going to be responsive and accepting of a higher priced model even when customization is being offered. It is not standard practice for most automakers to allow the customer to gaze at their production efforts, therefore this was a new innovation by BMW (referring to the camera systems). Not all consumers, especially those with higher resources and a high profile business position, are going to take the time out to follow manufacture of their customized vehicles until finally receiving the product. BMW should have sought out a broader market opportunity to include different demographics to ensure that interest would be broad instead of limited to just older women without small children. Practically, yes, the older female consumer usually has higher resources and more disposable income so this target group represented a viable market opportunity. BMW should have expanded the concept of customization to other markets with higher resource availability using lifestyle marketing that was relevant to their professional, family and social lives. Martha Stewart has received much negative publicity recently, and one way to improve the campaign was to use endorsers that had sustainability in providing BMW with a positive reputation. BMW seems to be running under the assumption that buyers with adequate resources to buy their expensive cars all dream about owning a luxury vehicle based on the company’s perceptions of the high class branding strategies developed over the decades. However, the market is now saturated with many different higher-priced automobiles, giving consumers less switching costs to consider and purchase another luxury brand. The campaign should have been given a more sophisticated name than dream it, build it which might have given the campaign much more sophistication that would be relevant for a maker like BMW. CAN CONSUMERS BE HAPPY WITH STANDARD OPTIONS? Many markets can be happy with standard car options as not all consumers are looking to buy luxury vehicles, but simply need something attractive, dependable and affordable. However, the automakers are constantly attempting to differentiate their products from other car maker rivals to boost market share and profitability. Sometimes, the only way to differentiate is through tangible product features and innovative styling since practically all other technologies and comfort factors are standardized with many automakers’ products. Through differentiation using actual production enhancements and options, the automakers have set the trend in consumers’ minds that upgrades and new enhancements are required instead of being comfortable and satisfied with their current vehicles. Now that consumers understand that they have a great deal of buying power in the auto industry, they are not likely going to become submissive and believe that standardization is acceptable. When a consumer is given many options, they are going to expect the same availability each and every time the purchase a new vehicle. The notion of “millions of combinations” is largely just a marketing ploy to illustrate that one automaker is superior to another. However, in the higher resource markets that are more attracted to BMW and other luxury vehicles, there is a type of self-spoiling that occurs in which these buyers want to pampered and catered to. Marketing theory supports this with the idea of conspicuous consumption, or using a product purchase as an outward social representation of their class status and wealth accumulation. Even though consumers really do not need millions of combinations, it becomes an expectation for improving one’s position in society when they have many different options and options that are unique from others that helps distinguish their own individuality as a high-class consumer. It would seem that only the lower income consumers can be happy with standardization in options availability since they have grown accustomed to being forced to buy vehicles with only affordable options in order to be able to make their payments. So much of the need to have millions of options available is a psychological aspect of consumer behavior which would be difficult to undo since automakers have infused the idea of diversity into their advertising models that consumers would likely feel cheated if suddenly these options were to be removed from different automobiles on the market. Read More