A CASE STUDY ON BMW.

Introduction to 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: Product promotion is the step by step procedure of informing reminding and persuading the customers about the organizations 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 organizations 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 positive feeling and confidence in the product and the organization is known as branding.

 Aim of the study:

  • The aim for 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 investigatethe brand value of the BMW in key potential clients of BMW
  • To ascertain how much people think that branding and promotion is important for the BMW cars.
  • To analyzehow 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 the successful the branding and promotional strategies the more successful the business will grow.

Research Question:

  • Why promotion and branding is 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 lot of products are available in the market which provided different discounts and offers then in such a situation customers focus more on quality rather than going for the discounts only.Brand that manages to bring a meaningful impression on consumers are more likely to win a special attention.

Value-added brands are also more likely to win a distinctive spot in consumers’ minds. In addition, 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 brand (brand trust) and a positive brand affect will also influence the attitudinal loyalty or consumer behavior 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, reluctant 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 highly valued relationship (Morgan & Hunt, 1994).

The trust towards the brand will influence the intention to continue purchasing and stimulate the 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 positive affect 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. Strong and positive brand affect will also cause a positive impact towards the 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 in 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  on  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 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 do  not  just get  a  need,  the  B2B marketer  have  to  help  the customer though 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 for BMW.

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

 Major Industry Players

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 into production facilities in emerging markets namely Latin America, 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 the BMW as well as automation industry and also the people interested in research on automation industry with its relation to the 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 investigation on fact finding and also then interpretation will be done with 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 internet, magazines, journals, websites and other available resources.

 Design for the Research:

Questionnaire will be designed and survey will be conducted and after carrying out the survey the data will be analyzed and the conclusions will be made. Telephonic interview 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 to dealers and marketing agencies, also we will try to contact people from 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 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 as 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 questionnaire. Also some information will be gathered by the top management to know about their perceptions for the effect of the mergers and acquisitions on the employees. The data will also be collected from the journals, newspapers, magazines, internet and other reliable sources.

Research Approach: Qualitative

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 a qualitative research was the best alternative.

Inductive vs Deductive Approach-

Although the two terms may sound like 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 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 hypothesis suitable for testing. In this case the researcher’s thinking runs from the general to the specific. He may have a hunch about human behavior 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 result of analysis will be considered as finding. These finding will help in formulation of conclusion.

 Conclusion:

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. Application of different tools of analysis will provide us with findings. However, from review of 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.

Activityweek 1week 2week 3week 4week  5week 6week 7week 8
Read literaturesXX
Secondary data collectionX     x
Preliminary researchX
Primary data collection.XX
Observation methodX
Organizing InterviewX
QuestionnaireXX
Processing the primary data.XX X
Analyzing the data.X
Preparation of draftXX
ObjectivesX
Studying the hypothesesX
Proving hypothesesXX
Complete other sectionsXX
BibliographyX
SubmissionX

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 behavioral 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 approaches.  Thousand Oaks, CA: Sage.

 

 

 

 

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