1 / 36

“The truth is that innovation is a key element for BMW’s success in the premium market and one of the key motivations to

“The truth is that innovation is a key element for BMW’s success in the premium market and one of the key motivations to buy a BMW” ----- BMW Group. Group Members Bhoopendra Chandan Nagendra Nipun Pallavi Saurabha Yamini. BMW MODELS VIDEO. Background Note.

adara
Download Presentation

“The truth is that innovation is a key element for BMW’s success in the premium market and one of the key motivations to

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. “The truth is that innovation is a key element for BMW’s success in the premium market and one of the key motivations to buy a BMW” ----- BMW Group BMW’s Innovation strategies

  2. Group Members Bhoopendra Chandan Nagendra Nipun Pallavi Saurabha Yamini BMW’s Innovation strategies

  3. BMW MODELS VIDEO BMW’s Innovation strategies

  4. Background Note BMW founded as Aero-engine manufacturing company in 1917 Restrictions b/o world war Motorcycle and passengers cars Series of acquisitions & joint venture First motorcycle model BMW R32 in 1923 BMW’s Innovation strategies

  5. Followed by….. Dixi (1929) 315/1 (1934) 319/1 (1934) BMW’s Innovation strategies

  6. BMW 238 sports in 1936 ..success in international racing events b/o lightweight construction, outstanding aerodynamics, high performance and elegance…. Company prestige crossed Germany BMW’s Innovation strategies

  7. Until 1950s BMW concentrated on limited no. of models and focus on other parts of EuropeBMW 507 Roadster • Powerful 3.5 lt., 8-cylinder and lightweight metal engine…. • huge success in automobile world BMW’s Innovation strategies

  8. Rainy Days…… • In 1950’s despite sustained effort to emerge as manufacturer of prestigious vehicle faced bankruptcy on account of decline in motorcycle market • With the help of an industrial financer, Herbert Quandt BMW was able to thwart takeover bid by Mercedes • Quandt exercised majority of BMW’s shares and initiated restructuring exercise to bring company back on track • BMW 700, a small car, came as the much needed boost and BMW regained its position in the market BMW’s Innovation strategies

  9. As part of restructuring initiative, BMW focused on sports sedan leading to the launch of its first of ‘New Range’ BMW’s in 1961 • Greater emphasis on advertising & sales support, combined with improving engineering and performance related aspects. • During 1970’s and 1980’s BMW expanded its operation in the USA Asia and Australia… cars got perceived as more stylish brand than other German brands like Volkswagen and Mercedes and became serious competitors to these brands in the premium car business. • In 1989 BMW appointed Karl Gerlinger (master marketer) to lead marketing division in the USA • Sales in the USA 1991…53,000 units. in 1992…. 66,000 units • Announced to set up new plant outside Germany … Spartanburg, South Carolina (US) in 1992 • In 1992 succeeded in outselling Mercedes in Germany • Acquired “ROVER” in 1994, production capacity increased by 3% to 503,526 units in 1995 BMW’s Innovation strategies

  10. In 1995 introduced BMW 5 Series and Z3 Roadster as well Positioned as elegance dynamic performance and safety BMW’s Innovation strategies

  11. BMW enter into small and medium size car categories with “The compact” • 1997 BMW 316g Compact and 518g touring version - first European natural gas car manufacture. BMW Diversification (1990’s) BMW financial service Bavaria Wirtschaftsagentur &Softlab Bavaria Lloyd Reicburo BETEK Bar-und Energietechnik Kontron Electronic BMW’s Innovation strategies

  12. BMW 1992BMW 1998 Revenue £ 15.97 billion £ 32.28 billion Net profit £116 million £ 462 million • In 1997 BMW ranked 69th among Fortune Global 500 companies FIZ (Munich) LITZ BMW R&D Hub: PATYO (California) BMW Designwork & Oxnard Testing Facility (California) BMW’s Innovation strategies

  13. One Sausage Three Different Length • BMW 3 Series • Focused on product efficiencies, constant generate new product/components ideas, launched new upgraded product BMW’s Innovation strategies

  14. BMW Innovation Management Model • 1997 BMW approached “Business Innovation Consortium (BIC), USA” Problems with BMW • Selection of best ideas • Difficulty in prioritizing the innovations flooding in divisions What to do… • Selection of winning innovation with short cycle time • Integrating the innovation process into BMW’s core business process BMW’s Innovation strategies

  15. By early 1998 BMW had created a well defined innovation management process focused on -- Unique selling propositions for each car to be launched -- Breakthrough innovations -- Concept cars to convey brand image at automobile shows Role of IMP or NPD • Systematic channeling of potential innovations to actual product development process • Ensured creative environment in the company NPD Innovation Research Innovation Management Innovation Transfer BMW’s Innovation strategies

  16. Steps in BMW’s NPD process BMW’s Innovation strategies

  17. Individual project were categorized under 4 categories • Potential Innovations • Must Innovations • Top Innovations • Breakthrough Innovation BMW’s Innovation strategies

  18. The Result • By 2002 BMW significantly decreased the ‘time-to-market’ new products and linked its revenue to the introduction of leading-edge product • Focus on strengthening its position as market leader in the premium segment • Adopted product offensive strategy, • increased R&D expenditure by 53%, • reduced time b/w idea generation and product development, • complaints came down drastically, • i-Drive technology, Active Steering • Revenue in 2002 $49.5 billion (9.9% increase compare to 2001), profit $2.36 billion (8.3% increase compare to 2001) BMW’s Innovation strategies

  19. The result BMW’s Innovation strategies

  20. The result….. BMW’s Innovation strategies

  21. The Result….. $29,400 $75,600 BMW’s Innovation strategies

  22. Source: - http://www.businessweek.com/magazine/content/03_23/b3836005_mz044.htm BMW’s Innovation strategies

  23. BMW BMW’s Innovation strategies

  24. Marketing Mix Product • BMW 3Series : Sedan, Coupe, Convertible, Touring, Compact • BMW 5Series : Sedan, Touring • BMW 6Series : Coupe, Convertible • BMW 7Series : Sedan • BMW Z4 : Roadster • BMW X3 • BMW X5 • BMW M : Sedan • Mini One • Mini Cooper BMW’s Innovation strategies

  25. Price BMW price range are from £ 16,000 to £ 60,000 Place Globally BMW’s Innovation strategies

  26. Promotion • Same advertising company WCSR since 1979 • James Bond film - The World Is Not Enough (Z8 before its launch) • Austin Power 3-Goldmember -( Mini cooper) “VIRAL MARKETING” • BMW Films (e.g.. ‘The Hire’ - increased sales by 12.5% in 2001 compare to 2000 • Marketing campaign ‘The Ultimate Driving Machine’ • Golden Eye: BMW Z 3 • Tomorrow Never Dies: BMW 750iL, R1200 Motorbike BMW’s Innovation strategies

  27. segmentation Geographic • Region Globally • Density of area Urban Demographic • Age-above 30 • Income-$ 25,000 and above annually • Occupational-professional, Businessmen Psychological • Personality Extrovert, Novelty seeker • Learning involvement high • Perception low risk • Attitude positive BMW’s Innovation strategies

  28. Psychographic • Lifestyle segmentation ---status seeker Socioculture • Social class ---middle upper and upper Behavioral • Benefit ---safety, elegance, technology • Loyalty status --- medium • Readiness stage ---aware, interested BMW’s Innovation strategies

  29. Positioning • Attribute • Image Differentiation • Image BMW’s Innovation strategies

  30. SWOT ANALYSIS STRENGTH • Diverse ranges of Products - BMW, MINI and Rolls-Royce • Strong Cash Flow Position • Increase turnover and trading profit • Strong Balance Sheet • World's leading Premium Quality Automobile Manufacturer • Brand Awareness • Human resources • Capabilities to turn resources into advantages BMW’s Innovation strategies

  31. WEAKNESSES • Perception of High Prices • Customer disinterest • Environmental issues: Pollutions • Buyer sophistication and knowledge • Substitute products or technologies BMW’s Innovation strategies

  32. OPPORTUNITIES • New Products • Market shift to globalization • Innovation & Alliances • Customers demand change to more comfortable and relevantly cheap cars • Diversification • New Technologies in Automobiles BMW’s Innovation strategies

  33. THREATS • New & existing competition • Volatility in Price of Fuel • New legislations • Consequences of the oil crisis • Economic recession • Market shift to globalization • Far-East Automobile companies expansion • Extremely high competition for customers and resources BMW’s Innovation strategies

  34. Need -------- Acquired Need) Ego need (Self Esteem, Prestige, Status) Goals -------- Product Specific Goal Motivation ------- Emotional Motive (Pride, Status) Personality -------- Superego, Compliant/Aggressive Individual Personality trait -------- Low dogmatic Social character --------- Other-directed Optimum stimulus level -------- High Variety/Novelty Seeking Exploratory Purchase Behavior BMW’s Innovation strategies

  35. Cognitive Personality ----- Low NC Brand Personality ----- Sophistication Makeup of self-image ------ Ideal Social Self Image Learning ------ Cognitive Level of involvement ------- very high (Extensive Buying) Stimulus Discrimination ------ BMW’s Innovation strategies

  36. BMW’s Innovation strategies

More Related