MK7040 Marketing in the Digital Age and CSR
Introduction
Digital marketing is one attractive and impressive platform for any firm to advertise its products and services through various digital channels. It is utilised for advancement of “brands and potential” associate consumers by utilising the internet and different digital communication to increase brand awareness of a firm. Similarly, this report will emphasise on the effectiveness of the digital market, which contains “segmentation and targeting”,“ position and branding, and a communication approach. Report also highlights BMW`s CSR and ethical issues which help the company elevate its performance in the automobile industry. BMW was established in 1917 by “Munich firm Rapp-Motorenwerke”. BMW integrated into “Knorr-Bremse AG” in 1920 and became “BMW AG in 1922” (Datta et al. 2018). Now this company has established “31 production and assembly facilities” in 15 nations, which helps this firm to have a sales network globally.
Hence, this car firm comes up with reliable and quality vehicles for its customers in a market. Company knows that product quality, service, customer relationships, brand recognition and product guide the company to run its business on the path of growth and development with the support of the digital market. BMW is aware that customers are not just buying its cars, but correspondingly its quality services, which are not offered by any other car firm in the market. BMW has to work for increasing any company’s position in the market. BMW`s revenues in 2021 were “$13.7 billion”, just “3.86 billion” Euros addition in comparison to 2020 (Bmwgroup, 2022). Therefore, BMW wants to increase its revenue so it can be possible to be part of the digital market.
Firm thinks that adopting these features in manufacturing car production will lead firms to come up with a similar trend of digitalisation, which makes the company’s products different from its rivals. As per illustration, Audi, Mercedes, Lexus and Porsche are giving tough competition to BMW. Hence, BMW will effectively use the digital market less influence the impact of its rival in market.
Part 2
Effectiveness of digital marketing
Segmentation and Targeting
Segmentation: BMW is aware of the effectiveness of digital marketing, which helps its firm to focus on segmentation to increase the influence of a digital market. According to Dash and Sharma (2019), BMW primarily operate demographic and geographic segmentation. Therefore, it will help companies utilise “Demographic Market segmentation” where firms permit buyers to operate purchase purpose determinations established on customers’ demands. Hence, companies particularly focus on a demographic segment that is additionally divided into age, gender and income.
Age: BMW targets those kinds of customers between 30 to 50 years and who possess great wealth because it is impossible for the middle class to afford this kind of cars for their purpose. On the other hand, firms only target wealthy backgrounds of people that is why firms always manufacture not large quantities of cars. Simultaneously, firms also come up with specific models, which only carry limited editions in the market. As per illustration, BMW i8, BMW 4 Series and BMW 3 Series are some models, which carry, limited editions for its users (Arbatani et al. 2019). Therefore, it will lead firms like BMW cars to be successful in the market and by the assistance of digital market; firms will elevate its business operation. As a result, firm wants to increase its selling purpose through digital marketing. Just like it were, most “expensive automobiles” sold out of the EU in 2019 along with an average cost of 50,260 Euros in the European market.
Figure 1: Selling range of different luxurious cars in comparison to BMW
(Source: Bughin et al. 2018)
From the above diagram, it is clear that with the influence of digital marketing BMW will successively increase its selling rate in the automobile industry in comparison to its competitors. Therefore, this firm holds a second position in Europe for selling cars. Companies want to be in first position so that effective and innovative digital marketing. It will help the firm to substitute its position with Volkswagen.
Gender: Mostly men are attracted to buy BMW cars model more in comparison to women due to its impressive configuration, body structures and its speed. As commented by Verevka et al. (2019), 64% of the latest BMW car model buyers are men, while 36% women are attracted to cars as well.
Income: BMW generally targets those customers who belong to `upper-class social groups’ ‘ because they are exact people for whom this firm will be able to purchase with affordability for the company’s cars (Betelin, 2018). In addition, they know its class and appreciate the company`s masterpiece whenever a firm comes up with latest models along with its prices. Therefore, with the support of the digital market those who are willing to buy BMW`s car are informed through social media like Facebook, Instagram, Twitter and YouTube and other platforms.
Geographic segment: BMW must target urban areas rather than rural areas while observing that kind of urban area where a high class of people live. As per illustration, London, Munich, Rome and Paris are urban areas where a high class of people stay. Hence, a corporation must situate a large number of branches in those sections to increase its selling factors. As a result, it will support firms to apply their business operations to increase their business revenues. On the other hand, the digital market helps to examine geographic segments for establishment purposes by taking close looks on digital data regarding business operations.
Figure 2: Market share of BMW in automobile industry
(Source: Pütz et al. 2019)
Above diagram helps to understand that due to the impact of digital marketing, the firm tremendously increases its business revenue in comparison to its previous position. On the other hand, BMW has 18% business revenues in comparison to rivals like Nissan, which hold 22% and Renault, which hold 21% business revenue (Falkhofen, 2018). In comparison to these two car firms, BMW is only restricted to 18% because the firm generates different kinds of models for high-class people. Similarly, Nissan and Renault generally manufacture cars for a middle-class section, which helps to create a good amount of revenue in comparison to BMW.
Targeting: BMW observes that Europe is an essential market for car selling purposes because their company’s requirements are completely fulfilled. As a result, it helped the firm to come up with a share of an increasing 7.3% between “January and December” 2021. On the other hand, BMW Group sold 682,895 vehicles in 2021 due to its “BMW division in Europe”.Therefore, a firm experienced a slight profit margin of 1.2% in its revenues (Olbert and Spengel, 2019). Simultaneously, the firm wants to elevate this profit margin due to the impact of digital marketing by expanding its branches for online purposes around the world without establishing its brand physically. BMW may target its brand reputation in comparison to its earlier position globally. As a result, through the support of digital marketing firms will increase its selling purpose by focusing on customer online feedback regarding its product and services.
BMW will effectively and efficiently work on that issue and increase the quantity of customers, especially for high-class people. Most importantly by introducing digital marketing BMW will successively increase its ROI component in a market in comparison to its rivals like Audi, Mercedes, Lexus and Porsche.
Positioning and Branding
BMW may utilise a “push or pull marketing” strategy for fixing its position and brand awareness in a market in comparison to its competitors. As commented by Moreno (2018), Push marketing may lead to faster sales in comparison to its earlier position because it is “powered by push out” to target audience. Through marketing and company has particularly chosen digital marketing to implement this strategy to earn maximum profit in business. On the other hand, Pull marketing begins internally and concentrates on constructing and “perfecting marketable” brands for unique and current clients. As a result, it will help to increase implementation of digital marketing fruitfully. Hence, the firm emphasises on “i pilots augmented” reality derivative introduced by Tango, “Google’s Smartphone AR technology” to increase its revenues for its business (Suarez et al. 2018). Therefore, the company will increase its business revenues, brand awareness, CSR approach and digital marketing.
On the other hand, this marketing approach helps to focus on customers’ demands creating a situation where a “push for demand” is constructed. In addition, a pull factor to fulfil that demand. For those who have not heard of your company, a push is needed. For those a little further along in their buyer’s journey, you can pull them in. Here, BMW will utilise “Pull marketing strategies” altogether to strengthen its position and branding in automobile industry to earn maximum profit in market (Tohanean et al. 2018). Further, with the support of the pull approach, digital marketing firms easily grabbed a large audience base because firms do not have to push customers while people are aware of their brand reputation. Therefore, in this customers eagerly wait to purchase models whatever their colours, configuration, and settings.
It is believed by its users that whatever car company comes up with is quality and class. Hence, BMW barely advertises on TV instead of this firm like to go digital marketing to grab different parts of globe’s high-class attention.
Figure 3: Global revenue of BMW group
(Source: Mohi et al. 2018)
Above figure demonstrated that “Pull marketing strategy” assist a firm to increase its capital revenue globally. Above bar, diagram discloses that from 2011 to 2019 its capital revenues sharply increase due to pull approaches of market. On the other hand, in 2019 it is touching a new peak regarding capital revenue due to the impact of digital market. Therefore, in this customers eagerly wait to purchase models whatever their colours, configuration, and settings increase market value.
Communication strategy
Digital platform used by BMW
BMW effectively uses its social media promotional strategy by creating hashtag campaigns on Snapchat, Twitter, and Google cloud. BMW is using the “connected driver technology” for all its potential customers through IoT technology in the global platform. This IoT technology helps the company to make their remote software update authentic service and experience. BMW offers “cooperative advertising programs to their local dealerships” for a quick boost to brand equity (Aws.amazon.com, 2022). Sharing the advertisement cost with the dealers The BMW always gives the chance of media placements for the store-level marketer. The organization is promoting its most technologically developed product, the BMW 5 series, through valuable channels. Successful promotion of the E-boost technology helps the company to give answers to the excessive fuel consumption and reduce fuel consumption while using the combustion engine.
Key message communicated
The message encoded by BMW was “The ultimate driving machine” which is its tagline (Kim, 2020). This message helped the company to capture a large market scale which made it easier to convince the general public. The aesthetic and innovative ideas of BMW converted its vehicles into ultimate driving machines. BMW makes automobiles that are more than transportation means. This tagline perfectly defines all BMW cars to communicate with the audience regarding the exceptional performance and design of the cars.
Purpose of communication
There are several purposes for communicating its key message to potential customers. One of its main purposes of communication is to answer prospects’ questions and queries and to impress them. Another purpose of communication is crisis management. This helps in providing clarity and proper direction to employees, customers, and other key stakeholders in any uncertain situation. The key function of strategic communication is to stabilize the organization during a period of crisis by promoting confidence, earning trust and loyalty, and engaging stakeholders (Freberg, 2021). This is the reason why BMW effectively maintains business continuity to successfully recover from any crisis. BMW responds effectively to any customer query or employee problems which is another way to retain them in the organization.
Type of appeal generated by the message
BMW relies on emotional branding for achieving long-term customer loyalty (Khamitov et al. 2019). Most successful brands are operating within the industry by maximizing their customer loyalty to a significant extent. The development of an emotional branding strategy through the representation of the brand’s logo serves as a source and symbol of trust for BMW’s long-term consumers. BMW makes use of this technique throughout its entire organizational mission thereby helping the brand to grow (Melnik and Maletina, 2019). BMW launched a spot video on YouTube which attracted millions of audiences in only two days. The spot went viral through word-of-mouth through which the company showed its sense of creativity by keeping a true brand focus. BMW made use of this video strategically to differentiate itself from its key rivals to attract a wider range of audiences. This is an effective strategy to build a strong brand identity by making an emotional connection to customers.
Communication method
BMW focuses on the “interactive communication method” which indicates a two-way communication method where the sender and receiver of messages participate in the communication process through receiving feedback. This interactive model makes the entire communication process more effective which leads the brand to better position itself in the market (Johnson et al. 2020). BMW uses social media and user-generated content which is a clear indication of the fact that the interactive method is used by the company because social media is a platform where both the company and customers interact by sharing their opinions.
Evaluation of communication method or message
The use of the “promotional communication mix model” could have been more effective for BMW in making apples to customers. As per this model, advertising, sales promotion, public relations, direct marketing, and personal selling are the various communication channels that a company can use for promoting its products and services. BMW can use any one or multiple communication channels for making the promotional activities more effective (Key and Czaplewski, 2017). Public relations is one of the effective means through which it is possible to promote a positive brand image by generating publicity and fostering goodwill through social media marketing thereby increasing overall sales rates (Cornelissen, 2020). Generating useful media coverage, hosting important events and charitable campaigns sponsoring are different examples of making public relations. Advertising is another paid type of media communication that can be effectively used by BMW. The company is required to post more ads in print form in magazines, newspapers, or trade journals. There should be ads on radio and TV announcements as well. Several sales promotion techniques such as price incentives, displays, and contests can also be used by BMW for making the promotional activity more appealing to the target market.
Part 3
CSR and Ethical Issues
CSR refers to the management concept where organizations cooperate with environmental and social responsibilities in their business interactions and operations along with their stakeholders. Thus, it is the responsibility of the business to protect the environment and community of the place, where they are executing business and gaining profits. However, there are some problems faced by the world due to digitalization in business operations (Georgieva, 2022). Therefore, CSR can provide positive value to the community and environment by creating positive branding for the company in the global market. One of the major CSR actions for improving the environmental condition is reducing the “carbon footprint”, which harms nature; likewise, many other strategies are working upon various problems with the help of the global leading company to manage sustainability.
On the other hand, Ethics is the term that can be regarded as practices and policies adopted by the business to sustain the business in any country effectively without violating its basic laws. Therefore, ethics can help companies to enhance the regulations by over viewing the behavior that can be accepted effectively by the government. Thus, this can also include a better relationship with stakeholders, customers, and investors (Henares, 2020). Therefore, better ethics in the business can provide the support of the loyal customers along with the government in regard to sustaining the business effectively.
The BMW Company is one of the reputed automobile companies, which is not only famous for its cars or other vehicles but also the reputation to maintain the CSR value in each country. The Company has invested in and supported more than 100 CSR projects including HIV, educational policy, and local community enhancement in various countries (Bmwgroup-werke.com, 2022). Further, the company also invested in many underdeveloped regions to promote digitalization all around the world. Moreover, the company also supported many small businesses to grow in the global market and collaborated with many other organizations such as Toyota, Louis Vuitton, and many more organizations. Thus, this also allows BMW to create a better relationship with other companies in order to be aware of CSR value in the global market. Additionally, the BMW Company believes in “clear responsibility, mutual respect, and trust”. Thus, the company’s ethical behavior in the market is considered an integral part of its business actions that are followed by employees for securing the “long-term” success of the organization in the market. The company strives to become a sustainable business by concentrating on the conservation of resources. Thus, the company is also eliminating CO2 emissions vehicles to recycling, towards expanding hydrogen technologies. Further, the company distributed 2000 filters to families in some cities of India where there is a scarcity of freshwater (BMW.in, 2022). Moreover, the company has invested R6 billion in South Africa to set up a production plant to create employment in their economy. Thus, through this, it is comprehended that BMW Company emphasizes various CSR activities to develop social and economic responsibilities to create a reputed branding of the company in the global market.
BMW particularly focus on different types of social issues like “zero carbon emission”, climate change and waste management to attract more high-class buyer for its cars. On the other, the firm knows if they will start to execute its business operation as per these issues, which are serious in the current era. BMW have to utilise digital marketing quite effective in business to earn great profit. Company observes that it can be mitigated with the support of digital marketing through which company make aware it users focus on these as well as like company. As a result, it will help to decrease the rate of carbon emission, climate change and waste management from atmosphere (Holub et al. 2019). On the other hand, by this initiation BMW will get support from different nations all around the world to execute its business operation in an effective and innovative to increase its brand awareness.
As a result, many world leaders will support this initiation by providing a cut in taxation so that firm will enhance their operation in different parts of world for doing business. (Gielens and Steenkamp,2019). Therefore, it becomes compulsory for firms to utilise CSR practice to increase its market value in comparison to its previous and it will be more useful by the introduction of digital market.
The company also has the vision to use 100% secondary materials to avoid the wastage of raw materials to promote CSR activity all around the world. This is because “people consume more than 100 billion tonnes of raw materials every year” which can cause scarcity for the future generation. Further, the company also aims to eliminate CO2 emission vehicles by the year 2030 by 40% from the global market by creating a better environment for the people due to the rise in global warming (Bmwgroup.com, 2022). Moreover, the company also focuses on the reduction of the carbon footprint of car manufacturers to reduce global warming in the environment. Thus, the company has adopted various strategies to transform the market totally reliable the climate. Therefore, this creates a better reputation for the company in the global market for following CSR values for the people.
However, the BMW Company also has some unethical business practices and a violation of CSR value in the market. The company has been alleged to the child labor in its manufacturing process. Further, the company also used to make their employees work overtime and under pressure. In addition to this, there are various allegations against the company such as bribery, racial discrimination, and many more. Thus, the company claims transparency and trust in their business actions with the customers and stakeholders in the market. Therefore, these allegations have created trouble and a negative reputation for the company in the global market. Thus, the company needs to follow strict actions against such activities and need to strengthen its policies to avoid such unethical practices in the business further (Zeisel, 2020). Moreover, the company can also adopt some policies to restrict such activities in their business practices in the coming time. Thus, this can benefit the company to maintain the sustainability of their business in the global market along with a better reputation.
Recommendations
The company needs to connect to its values to comprehend the better branding of the business in the global market. Further, BMW Company needs to be clear, in case any unethical practices are executed in the business, the company needs to accept and provide information in the market. Thus, it can create more assumptions in the market regarding the topic, which can create a negative branding of the company in the market (Ar and Abbas, 2022). The company needs to accept the policy of improvement because this is the only factor that makes the company able to develop its business and develop its policies and strategies in time to avoid any violations by any of the employees. Moreover, the company needs to be strict regarding their business ethics and take up some strict actions against the violation of those ethical practices, which can effectively reduce such action from the company (Munro, 2020). Thus, this can maintain a better reputation of the company in the market and hence, can bring more profit along with positive branding for the development of the business.
Part 4
Conclusion
BMW targets customer segments from the upper class of society as they are the ones for whom the cost of BMW cars is affordable. The company has positioned itself globally through its symbol of quality. Technological advancement and a high level of innovative capabilities have enabled the high performance of the automobile brand. It communicates its key slogan as a means of promotional activity to its potential customers. The main purpose of communication is to deal with all kinds of crises that might emerge at any point of time within the organization. BMW applies an emotional branding strategy to enhance customers’ faith and loyalty. The automobile firm can also apply the communication mix model as an alternative to make the marketing activities more effective. The advertisements of the company are more focused on the appearance and style of the car. Promotional activities highlight the customer satisfaction concept for gaining enhanced positive business outcomes. BMW Group contributes several resources to the social issues of the business. The corporate culture of BMW is characterized by responsibility, trust, and mutual respect. Lawful conduct, as well as, ethical behaviou is an integral part of the organizational culture and an essential condition for achieving long-term success. From the above discussion, it can be concluded that digital market is quite suitable for BMW because it help firm to focus on latest approach through which firm will increase effectiveness of the digital market. As a result, firm has started the initiation through which firm will increase its selling purpose for high-class people in different section of world. Therefore company had focused on “segmentation and targeting”, “position and branding” and a communication approach to increase its capital globally. Hence through this report BMW`s also highlighted its CSR and ethical issues through which firm is increase its market reputation in market of automobile industry. Hence, a report will be created on BMW`s digital market where a report will focus on its background, and its core products by influencing digital market initiation in market. BMW successively utilised CSR practice to increase its market value and earn global recognition in automobile industry with support digital marketing.
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