Branding and promotion is Important in Automotive industry “A CASE STUDY ON BMW

 Introduction to the organization:

BMW is a German automobile, motorcycle and engine manufacturing company founded in 1916. It also owns and produces the Mini brand, and is the parent company of Rolls-Royce Motor Cars. BMW produces motorcycles under BMW Motorrad and Husqvarna brands. BMW is known for its performance and luxury vehicles and is a global leader in premium car sales.

(automotive-online.com)

Background Study: Promotion and Branding

PROMOTION:

Product promotion is the step by step procedure of informing reminding and persuading the customers about the organization’s service or products. During this process of promotion many tools are used these tools are called the promotional mix of an organization.

The promotional mix consists of sales promotion, personal selling, advertising and public relations. The IMC is coordinated and a focused effort.

Product promotion:

Product promotion is the step by step procedure of informing reminding and persuading the customers about the organization’s service or products. During this   process of promotion many

Tools are used these tools are called the promotional mix of an organization

Branding:

• Differentiating the services and products of one firm from another firm and maintain and building an image that gives a positive feeling and confidence in the product and the organization is known as branding.

Aim of the study:

• The aim of this research is to know how much brand management strategy is important for a successful company such as BMW.
• This project also aims to bring out the various issues related to branding and promotion for the organization BMW.

Objectives of research:

• To analyse the brand management strategy of BMW.
• To investigate the brand value of the BMW in key potential clients of BMW
• To ascertain how much people think that branding and promotion are important for the BMW cars.
• To analyze how the sales can get affected by branding strategy for the BMW cars.

Purpose of the Study:

The purpose behind the study is to explore the potentials of branding strategy which can be utilised for BMW to increase the profits of the organisation. It will also help the company to study the effects of branding and promotion on consumers who are the essence of any successful business. The more successful the branding and promotional strategies the more successful the business will grow.

Research Question:

• Why promotion and branding are important for BMW?
• Why organizations should adopt branding and promotional strategies?
• What are the advantages of branding and promotion to the organization?

Literature Review:

This chapter will review studies that are significant considering our research questions and purpose.  The first section of this chapter will cover the different types of sales promotion within the limitation followed by sales promotional importance in the BMW.

Brand Image

As per Jobber (2005), discounts and offers attract more customers and help them to arrive at a conclusion while choosing any product or service. There are a number of schemes as well as the promotional messages which individual receives telling about the good things about the product. According to Lamb (2007), whenever such a situation comes up customer depends more on its own experience in the past related to that particular product and then arrives at any decision, evaluates the new offering in that context, and selects that brand that he would have used earlier with satisfaction.

Such a situation arises when a lot of products are available in the market which provided different discounts and offers than in such a situation customers focus more on quality rather than going for the discounts only.A brand that manages to bring a meaningful impression on consumers are more likely to win special attention. Value-added brands are also more likely to win a distinctive spot in consumers’ minds. In addition, the brand could affect consumers’ brand affection and brand trust. Consumers attempt to choose the brand they want with the consideration of the value of purpose, pleasure, availability, uniqueness and quality (Sheth, 2001).

Brand Trust, Brand Affect and Brand loyalty

Consumers’ trust towards a brand (brand trust) and a positive brand effect will also influence the attitudinal loyalty or consumer behaviour towards the brand (Chaudhuri & Holbrook, 2001). This view is confirmed by Aaker (1991), Aasel (1998), Beatty & Kahle ( 1988) and  Jacoby & Chestnut (1978). These studies emphasized that there are several levels of consumer commitment towards the brand in the context of brand loyalty. The commitments are (among others): trust, continual purchase, reluctance to switch brand (brand switching) and the joy or happiness (affect) when consuming that brand. Brand trust will determine brand loyalty or consumer commitment towards the brand because trust is potential in creating a highly valued relationship (Morgan & Hunt, 1994). The trust towards the brand will influence the intention to continue purchasing and stimulate high attitudinal loyalty (Chaudhuri and Holbrook, 2001). In the relation between consumer loyalty and commitment, Ghundlach et al. (1995) found that there is a relationship between loyalty and the positive effect accepted by the consumers. Dick and Basu (1994) emphasized that brand loyalty will be even better if the brand is placed in a positive emotional mood/affect. The strong and positive brand effect will also cause a positive impact on consumer brand loyalty, in both purchase loyalty and attitudinal loyalty (Chaudhuri and Holbrook, 2001)

According to Low & Mohr (2000), manufacturers continue to spend a large amount from their communication budget on sales promotion.

The sales promotional tools companies are using are divided into value increasing and value-adding tools. (Peattie & Peattie, 1995)

The advantage of value-adding is that they do not risk being involved or starting any price wars.  Trying to put effort into value-adding and value increasing promotions often lead to success but there is no guarantee. The main difficulty for companies trying to be competitive through the use of sales promotions is to choose the tool most appropriate to the company’s brand and to the market where the company’s products exist.

Alvarez & Casielles (2005) say research is telling that sales promotion activities should be done infrequently when the customers do not expect it. If the customers are aware of when the sales promotion activity will be headed, then the results will not be as successful.

Alvarez & Casielles (2005) continues it is also crucial for the companies to decide what the objectives for the sales promotion are. When the objectives are decided, the choice of promotion technique can be decided. The sales promotion activities chosen will depend on the objectives.

Any successful B2B strategy has to help the customer to be loyal and supportive to the firm and its products.  The customer does not just get a  need,  the  B2B marketer has to help the customer by getting him to feel a need and then buy the product and finally become loyal. (Peattie, K., Peattie, S. and Emafo, E.B. ,1997)

When a  B2B  marketer wants to develop strategy-driven promotions that motivate  B2B customers, they have to find a solution to the problems with purchase barriers. First, some key questions have to be answered; who is the true decision-maker at the targeted company; what excites the decision-maker; what is holding the buyer back. When these questions have been answered then the type of promotional strategy can be chosen and the sales promotional technique derived will be depending on the company’s objectives. (Low, GS & Mohr, and JJ,2000)

In order to develop a successful sales promotion strategy, a clear definition of the targeted market must be included.  It is important to understand why the potential customers are not buying the products and develop a  specific program to overcome these barriers.  To understand the customer’s mental process the Customer learning curve can be of importance. There are different types of sales promotional tools and they affect sales,  profitability and value-added to the brand in different ways. (NdubisiN O and MoiC T ,2005)

Therefore,  it is appropriate to study sales promotion from a  B2B  perspective and further investigate the impact that different sales promotional tools have on BMW.

Saying of the writers which are collected in the literature review will inform whether the promotion and branding are important in marketing for the organization BMW.

Major Industry Players

The worldwide automobile industry is largely dominated by five leading automobile manufacturing corporations namely Toyota, General Motors, Honda, Volkswagen AG, and Daimler Chrysler. These corporations have their presence in almost every country and they continue to invest in production facilities in emerging markets namely Latin America, the Middle East, Eastern Europe, China, Malaysia and other markets in Southeast Asia with the main aim of

Reducing their production costs. (Joe Miemczyk, Mickey Howard, 2008)

Importance of Study:

This project aims at bringing out the importance of promotion and branding for BMW. This project will help BMW as well as the automation industry and also the people interested in research on the automation industry with its relation to branding and promotion. This project will focus on the benefits of the branding and promotion strategies that a firm can obtain by investing in these two marketing subjects.

Methodology

The research methodology is descriptive in nature which is based on the investigation on fact-finding and also then the interpretation will be done with a suitable understanding of subjects. As this is a descriptive study so the data collection will be from Primary Sources by interviews, observation and secondary sources such as the internet, magazines, journals, websites and other available resources.

Design for the Research:

The questionnaire will be designed and a survey will be conducted and after carrying out the survey the data will be analyzed and conclusions will be made. Telephonic interviews can also be done in order to collect the primary data for the purpose of research. Qualitative research will be conducted to achieve the desired objectives (Creswell, J., 2003).

Strategy for sampling:

SELECTION OF SAMPLE

Sample Size: 20-30

Type of Sampling: Convenient sampling and telephonic Interviews

Randomly selected area

Time requirement: 1 month

Tool required: Well designed and structured questionnaire

The sample population will be mainly concentrated on dealers and marketing agencies, also we will try to contact people from the BMW marketing department.

Data Collection

1. The information to be collected and gathered was focused on the research topic to be sufficient and enough to describe the data.
2. Both Primary and secondary data will be used in this study project. Since this topic had the ability to give rise to discussions an open-ended interview has been used. The interview will be conducted personally. The interviewee will be sent the questions a day before for him to get prepared and motivated for the interview and the issues to be discussed in the interview.
3. Secondary data like the company brochure’s will be used during the research process

Primary Data Vs Secondary Data-

Data, or facts, may be derived from several sources. Data can be classified as primary data and secondary data. Primary data is data gathered for the first time by the researcher; secondary data is data taken by the researcher from secondary sources, internal or external. The researcher must thoroughly search secondary data sources before commissioning any efforts for collecting primary data. There are many advantages in searching for and analyzing data before attempting the collection of primary data. In some cases, the secondary data itself may be sufficient to solve the problem. Usually, the cost of gathering secondary data is much lower than the cost of organizing primary data. Moreover, secondary data has several supplementary uses. It also helps to plan the collection of primary data, in case, it becomes necessary. We shall therefore discuss secondary data first and then take up primary data.

Secondary data is of two kinds, internal and external. Secondary data – whether internal or external – is data already collected by others, for purposes other than the solution of the problem on hand.

Business firms always have a great deal of internal secondary data with them. Sales statistics constitute the most important component of secondary data in marketing and the researcher uses it extensively. All the output of the MIS of the firm generally constitutes internal secondary data. This data is readily available; the market researcher gets it without much effort, time and money.

Sources of External Secondary Data – Examples

The Internet is a great source of external secondary data. Many published, statistics and figures are available on the internet either free or for a fee.

In research, Secondary data is collecting and possibly processing data by people other than the researcher in question. Common sources of secondary data for social science include censuses, large surveys, and organizational records (Mintel). In sociology, primary data is data you have collected yourself and secondary data is data you have gathered from primary sources to create new research. In terms of historical research, these two terms have different meanings. A primary source is a book or set of archival records. A secondary source is a summary of a book or set of records.

Advantages to the secondary data collection method are – 1) it saves time that would otherwise be spent collecting data, 2) provides a larger database (usually) than what would be possible to collect on one’s own However there are disadvantages to the fact that the researcher cannot personally check the data so it’s reliability may be questioned.

Resource used for Research analysis

The resource that is adopted in this research analysis is qualitative. The qualitative data will be gathered by contacting dealers and asking them questions telephonically and through a questionnaire. Also, some information will be gathered by the top management to know about their perceptions of the effect of the mergers and acquisitions on the employees. The data will also be collected from journals, newspapers, magazines, the internet and other reliable sources.

Research Approach: Qualitative

The qualitative research strategy was the best approach to get better knowledge and understand in that research area since this was the main purpose of the study. Since time constraint was an important factor during this study quantitative strategy could not be used a restricted qualitative study was the best alternative. Since the data to be collected consisted of such perceptions and values, therefore, the research was not quantifiable, therefore qualitative research was the best alternative.

Inductive vs Deductive Approach-

Although the two terms may sound quite complicated and scientific, it is quite easy to tell the difference between the two so you can figure out what they mean. Each one of these two methods is more important depending on the nature of the research.

First of all, inductive research is based on inductive reasoning or thought which turns a simple observation or thought into a general theory. In other words, it takes one piece of information and tries to generalise it from there. A researcher’s thought path goes from the specific to general and a hypothesis is formed.

Deductive research, however, is sort of the opposite of inductive but then again, it isn’t quite. Deductive research takes a lot of information that a researcher may have gathered or general information such as theories, laws or a principle and tries to draw a conclusion directly from that. A deductive thought transforms general theory into a specific hypothesis that a researcher is able to test and prove right or wrong. If the hypothesis is proved to be true or correct, then you may also say that the general idea that sparked the hypothesis is also true.

Neither one of these methods of research is necessarily better than the other, however, both have their advantages and disadvantages depending on what research you are conducting. In interpersonal relationships inductive research tends to be the method that is used the most however for general scientific research, deductive research is more popular and the better one to use.

Inductive research is based on inductive thought or reasoning which transforms specific observations into a general theory. Here the researcher’s thinking goes from the specific to the general. If he observes a pattern in society, he may form a hypothesis on it, conduct surveys or experiments to verify his hypothesis and thus reach a conclusion. However, deductive research is based on deductive thought which transforms general theory into specific hypotheses suitable for testing. In this case, the researcher’s thinking runs from the general to the specific. He may have a hunch about human behaviour or some other social phenomenon and he proceeds to collect data to prove it right or wrong. Working deductively, he first states the theory in the form of a hypothesis and then selects a method by which to test it. If the data supports the hypothesis we conclude that his theory is correct

Analysis and Finding:

All major facts and figures those will be found in the result of the analysis will be considered as findings. These findings will help in the formulation of the conclusion.

Conclusion:

A critical review of the literature will provide a firm ground on which a structure of different types of data and their collections will be erected. The application of different tools of analysis will provide us with findings. However, from a review of the literature up to the analysis and findings, each element will have to be constantly aligned with objectives. Integration of these objectives will provide us with a clear and applicable conclusion.

References:

• Low, GS & Mohr, and JJ 2000 ‘Advertising vs. sales promotion: A brand management perspective. Pg 120-121.

• Peattie, K., Peattie, and Emafo, E.B. (1997), ‘Promotional Competitions as a Strategic Marketing Weapon.

• Alvarez, Rodolfo Vázquez Casielles. (2005) Consumer evaluations of sales promotion: the effect on brand choice.

• NdubisiN O and MoiC T (2005), Customers behavioural responses to sales promotion.
• Matt Haig (2002): Brand royalty: how the world’s top 100 brands thrive and survive.

• Jean-Noel kapferer; (2004) the new strategic brand management: creating and sustaining .brand equity

• Mike Moser (2004); United we brand: how to create a cohesive brand that’s seen, heard.

• Creswell, J.W. (2003). Research design. Qualitative, quantitative and mixed methods approach.  Thousand Oaks, CA: Sage.