BMW: Marketing Process Analysis

BMW: Marketing Process Analysis Marketing is a social and managerial process by which individuals and groups obtain they need and want through creation and exchanging products and values with others (Kotler et al. 2005). This definition incorporates both societal and organisation involvement in the realisation of the needs and wants of consumers through delivering products that is evaluated in terms of value created for the creator as well as the consumer rather than just offering a product. According to Groucutt (2005), marketing is all about symbols, brands, and choosing of products and services which are focused and related to the customer. This definition indicates the symbolic meaning of products as socio-economic symbols to alter the ego state of the target consumer. Marketing is a process for defining markets, assessing quantitatively the need of the consumer segments within the markets, allocating value propositions to cater to the needs, conveying the value propositions within the responsible zones of the organisations in relation to the output, communicating with respect to the delivery of the value propositions, and finally monitoring the delivery of the values (McDonald 2007). This definition point out the very calculated movement from the organizations part in utilising its resources to suitably target the right markets through properly defining the market and thereby providing the right product attached with the right value. The feedback from the related market is also a part of the marketing process to ensure the commercial viability also. BMW- Marketing process (LO 1.1) : Marketing process lays down the pathway to fulfill the unfilled needs of the customers by introducing products and services in the market to satisfy growing needs of the customers. The marketing process of BMW is modeled in sequence of steps which includes situational analysis, defining marketing strategy and appropriate marketing mix which promotes products sale (Kotler 2006). One of the key advantages of marketing process of BMW lies in the fact that its marketing approach is based on the situational analysis which catches the attention of the target audience, who are the segment A of the society (BMW 2010). Situational analysis as part of marketing planning process of BMW serves as a powerful tool to capture Australian luxury market by satisfying the changing consumer trends in the market. The advantages from the elements of marketing process are discussed in the following paragraphs. the benefits and costs of a marketing orientation (LO 1.2) : Cost Benefit 1. The two recently launched models X3 and X5 of BMW are a result of the market research conducted to serve the target audience. The cost spent on the research and development activities was enormous. Besides cost, lot of time was spent to conduct analysis on the target market and to find out the requirement of the customers. These Sport car models are the result of the in-depth market research to satisfy the customer demands. 2. The cost incurred on the marketing activities including the promotion, press conference, press release to target the audience was skyrocketing high. 1. Increased customer satisfaction as many people were craving for these new models of BMW. 2. The increase in sales and profits helped the company to attain competitive advantage in the age of growing competition. Micro and Macro Factors affecting Decision Making SOWT (LO 2.1) : The success of BMW lies in the STP strategy which is based on segmentation, target audience and positioning strategy to capture the targeted population (www.bmw.co.au). By means of segmentation, BMW identifies specific buying characteristics of the target audience. BMW segments the society on the basis of geography, demography, socioeconomic and behavior characteristics of the society (Drummond and Ensor 2001). Geographically, European countries and North America serve as the main markets for BMW automobiles as these areas are most industrialized nations and the local residents are financially well off to buy high priced cars due to the increased per capita income. In respect to demographics, the men and women both aged 30-50 years are the main users of M3 and M5 models. Behaviorally, these audiences have a clear image about the company and its products. They believe in superiority, performance and excellence before making a purchase. BMW has excelled in its performance as its produc ts are high in quality and also technologically superior. BMW has been able to create a good brand image in the minds of the people by means of innovative advertising campaigns. BMW due to its strategic positioning is known for age old tradition of quality. BMW M series is among one of those luxury cars which can be recognized by the crowd at a distance due to its successful marketing strategy based on positioning, targeting and segmentation. SWOT Analysis Strengths: BMW Automobiles is consistent in delivery quality projects. The firm comprises of robust workforce for effective product delivery. The firm makes use of latest technology, owns world class equipment and all the modern facilities in the designing and development of car models. Weakness: BMW is a global leader but still faces some shortcomings which are its incapability to work on small scale projects. BMW is known for its large seated cars and its inability to target the smaller segment is the only weakness. Opportunity: BMW automobile is rapidly expanding in different parts of the world. BMW makes use of latest technology to develop best of cars and operate effectively in international markets. Threat: The survey shows that the target market for BMW car model is looking for more value in the product which serves as a serious threat to the company. Marketing Mix and Marketing Process-4ps (LO 2.2) : While considering marketing process, marketing mix of BMW cannot be kept in isolation. The marketing mix forms an important part of the decision making process. The first P is the product which provides customer with the description about the product and how it meets the customer requirement. Example BMW X3, BMW X5 models, offered by BMW go through product life cycle which determines the age and maturity of the product in the market. The products developed ensure constant income and the company also develops replacement products on consistent basis for a fair settlement. The prices of BMW cars varies depending upon model customer has asked for like sports car which are priced high, the engine size also determines the price of the product and many more. The pricing for BMW X3 is competition oriented and same for similar brands as the market is large and creating large profits is not as important as it will be for a small car. The place and location for BMW cars follows a distribution chain network comprising of manufacturer, dealer and consumer. The organization is in tie ups with the superior dealers across the world and they are further responsible to offer the product to the customers across the globe at strategic locations. To promote the BMW models X3 and X5, a broad range of advertising campaigns including print and television media are used for product launch, color supplements etc. the slogans used for BMW are smart choice, the ultimate driving machine designed for peace of mind have been used to create competitive edge in the market, change the perception of people, mould their behavior towards car consumption and differentiate their products from competitors. Target Strategy ( LO 2.3 ) BMW follows a differentiated strategy catering to people with specific segmentation (David 2006). An example, BMW M series is a super sports vehicle and refers to specific target audience. BMW made changes in its car models when introduced in India as compared to its American version. There was higher ground clearance so as to make the cars compatible to Indian road surface, high resistance to dust in Indian market, horns located on the steering and not lever were some of the changes introduced to make it suitable for Indian market. Buyer Behavior and Marketing Activities ( LO 2.4 ) Consumer buying behavior is a blend of mental and emotional process and involves elements from sociology and psychology which affects consumer behavior while making purchase. In case of exclusive products like BMW M series the consumer purchase behavior is triggered by psychological factors, status symbol which influences customers attitude and behavior to make a purchase. Product Positioning ( LO 2.5 ) BMW M series, X3 and X5 are synonymous with performance and advanced technology used in driving. Drivers can now connect sports vehicle to the roads with high performance. The sport seats provide supportive front, back and thigh comfort. There are powerful headrests for drivers comfort with leather steering wheel with the horn placed at the lever comes to the ease of the driver. The motronic engine is powerful on all road surfaces and provides smooth drive in all season (www.bmw.co.au). Sustainable Catchment Management: Principles and Practice Sustainable Catchment Management: Principles and Practice What is meant by the world water crisis? Critically assess the contribution of River Basin Management in addressing this crisis The worlds freshwater is commonly discussed in the literature as being a finite resource under increasing pressure from the greater demands being placed upon it globally (Postel 2000, Hamdey et al 2003, Oki and Kanae 2006, UNEP 2007). It has consequently become a highly contentious resource, and in recent years the focus of much debate on how best to manage it; with the latest favoured paradigm (particularly in developed countries) being that of holistic sustainability achieved using the best practice of basin-wide management (Biswas 2004, Watson et al 2007). Such an approach is particularly emphasised in key policies such as Agenda 21 and the Water Framework Directive, with the latter enforcing the creation of River Basin Management Plans by law for all EU member states. This paper will discuss whether there really is a world water crisis, and if so to what extent river basin management (RBM) can help to address this using case examples such as the Murray-Darling basin to discuss t his in context. According to the research of Oki and Kanae (2006 pp1068) the global consumption of renewable freshwater resources is well below its Malthusian limits, with only 10% of the maximum available blue water and 30% of green water being presently used. However, because its distribution both in quantity and quality for purpose is spatially and temporally uneven as shown in figure 1 water stresses exist through a demand and supply imbalance. Gleick 1998, Hamdey et al 2003, and UNEP 2007 amongst others cite figures such as already 80 countries with 40% of the world population suffer serious water shortages (Hamdey et al 2003 pp3) and more than a billion people in the developing world lack access to safe drinking water (Gleick 1998 pp487), which suggests that water stress is a major issue (as reflected in the Millennium Development Goals); and with population growth/demographics (figure 2), economic, standard of living, and climatic factors set to change, such stresses are expected to worsen on the whole through increasing the imbalance. This is especially true for developing countries since an estimated 90% of the 3 billion people expected to add to the global population by 2050 are expected to reside in such countries with many of which already experiencing high water stress (UN 2007 cited UNESCO 2009). At what point down the line an actual absolute crisis at a nation scale is reached is still yet to occur; although given the social and economic value attached to water, and its three-dimensional effect upon food supply, ecosystem health, and standard of living for example, it may already indicate a crisis is underway (Newson et al 1999 cited Newson 2000). This is especially true if freshwater access is considered as a basic human right (Gleick 1998). Assuming this, RBM is often discussed in the literature as being a viable management option to address the crisis, since its approach is holistic and all-encompassing. Its current favour comes from the fact that unlike the traditional response to water shortages assessed through developing more supplies often via unsustainable sources and hard engineering practices such as damming rivers (Hamdey et al 2003) it tries to achieve long term sustainability through encompassing land-use planning, environmental management, and agricultural policy into the management of all surface and subsurface water within a catchment. This theoretically allows for all of the direct and indirect natural and anthropogenic demands placed upon the resource to be addressed and met under a best-practice regime to achieve an optimal relevant management outcome. A classic example of where such a policy has been successful is in the Murray-Darling basin, southeast Australia. The RBM regime here is a highly evolved form of institutional arrangements first started in 1917, and consequently modified, to meet the desired outcomes and changing pressures on the 1 million Km2 five jurisdictional state catchment. At its heart the scheme seeks to promote and coordinate effective management planning for equitable, efficient and sustainable use of water, land and other resources (Pigram 1999 pp108), which it achieves through a hydraulic approach using top-down policy making and bottom-up implementation, coordinated through the central Murray-Darling Commission (Shar et al 2005). In doing this it allows for all of the key stakeholders within each state to meet and discuss how best to manage the water resources to maximise the resultant biophysical, economic and social interests not only within each state (and its respective water share), but for the whol e catchment. Theoretically this coordinates the upstream-downstream interests and encourages more productive/efficient use of water through improved technology such as crop per drop (Postel 2000), which in turn allows all of the water demands to be attained equitably. And, combined with the top-down governance system setting standards which need to be reached by every state regarding water quality and quality, ecological requirements and permitted degradation levels through land use policies, it ensures that management is not static and behind the changing catchment pressures upon the water resource. This is not to say however the system is perfect since its effectiveness depends on the cooperation of each state government, and as of yet no true full sustainability has been achieved (Pigram 1999). However, with regards to the world water crisis it is clear to see that in this instance, along with many others, RBM is having a positive impact. This is because it is encouraging through laws and other means the more efficient and equitable use of water (Postel 2000), whilst regarding the whole basin and its long term demands and pressures such as climate change. In doing so it may lessen the effect of future crises/pressures through being proactive. Similar RBM regimes also exist under other political systems such as throughout the whole of the European Union (due to Water Framework Directive legislation) and South Africa (since 1998). In the latter Gregersen et al (2007) states that although the regime is working it is not yet sustainable, since such management systems take several years to develop and offer no ready made solutions. Therefore at its national level it is not fully able to address the water crisis, although it seemingly is on the way to try to do so through using a management system which looks to achieving this from the outset. It must be said however that most of the successful RBM regimes are in developed formalised society countries where the fundamental water stresses are often far lower in the first instance (see figure 1). Such systems cannot be directly transferred between political institutions easily due to the context in which the regime was fundamentally formed to meet within the founding country regarding the hydraulic and climatic conditions, demographics, socio-economic conditions and the structure of the water sector (Barrow 1998, Hunt 1999, Shar et al 2005). For example Hu (1999), Malanu et al (1999) (cited Shar et al 2005) and Hunt (1999) each found that the Murray-Darling RBM system could not be successfully transferred to the Chinese, Vietnamese and Solomon Island contexts because of such issues; with Shar et al (2005 pp46) arguing that transferring RBM regimes between developed and developing countries is particularly problematic since the problems developing country find critical have e ither remained unresolved or irrelevant in developed country river basins such as ground water exploitation. Thus in regard to the world water crisis it provides little use in this sense, especially since the greatest stresses/crises are expected to occur here. Hunt (1999) therefore argues that the contextual fit between policy development and application is key to managing the water resource successfully. In setting the correct framework to set play and play in provides an effective environment to address the water crisis in, whether through RBM or not. In some cases I would also argue that to address the current water crisis RBM can only be used as part of the solution, due to the interconnectivity of the water resource with standard of living (relating back to the Millennium Development Goals) and economic development. If full RBM sustainability is strived for under the current conditions, inclusive of the environmental requirement, it may only serve to worsen the current crisis such as in Jordan which withdraws some of its supply unsustainably from non-renewable aquifers (Macoun and El Naser 1999). The same is true for other basins globally such as in the Colorado, Tennessee and Yangtze river basins, since in order to meet their past a nd current demands, supply had to be increased through building dams for instance. This could be seen in some cases as being unsustainable due to the impact it has on the basin, and even though the two former river basins are now managed under RBM regimes (Newson 2009) they are operating under modified conditions. RBM still has value however in promoting more efficient water use (Postel 2000) and sustainable ethical management, so should not be completely ignored in management. The contextual fit of countries as a whole is important in determining the best approach to address the world water crisis. RBM may also fail in addressing the world water crisis too if it fails to be effective itself in the first instance. For instance since RBM seeks to achieve equitable sustainability (Barrow 1998), unequal power sharing may result in such a failure. To exemplify this if a dam was allowed to hold back more water for power generation it would put increasing pressure on the quantity of flow for the ecological needs and irrigative agriculture uses amongst others. Similarly if a factory was allowed higher pollution levels then the changes in the water quality could draw a system closer experiencing a water crisis (assuming it was already highly stressed). This is especially true if a non-integrated RBM regime is used, since the different interests of each RBM stakeholder groups, such as land owners, farmers, developers and conservationists would prioritise their needs over others. This consequently may be ineffective due to the differing overall outcomes, needing some coordination and comp romising to a certain degree to be effective in terms of long-term holistic management. A similar failing may occur within international river basins also if a common-goal transboundary management agreement cannot be established in practice even if it is agreed upon politically. This is the case today between Israel and Palestine despite the fact of the road to recovery (common goal) plan. Israel in 2003 abstracted 95% of the water from the diverted Lower Jordan to meet its own abstraction needs and left Palestine with only 5%. Consequently Palestine is in a water crisis since it cannot meet its own water needs (Frederiksen 2003). To be effective therefore in the first instance RBM plans need to be authoritative, equitable, coordinated and true to RBMs initial purpose. Only then can it help in addressing the world water crisis. In conclusion therefore it can be successfully argued that RBM is a worthwhile management option to pursue in relation to addressing the world water crisis. Where such regimes are well established and operational, such as in the Murray-Darling catchment, its sustainability approach to management allows for all of the demands and threats/pressures to the freshwater resource (such as excessive nutrient runoff from poorly managed land) to be identified and dealt with equitably and accordingly within the basins long-term carrying capacity. But, given the contextual fit of each country with regards to its current resource base, water pressures, and demands/needs, it may mean that in the grand scheme of things RBM may not be the most suitable management option to address the crisis with on its own. Interestingly RBM is according to Shar et al 2005 harder to implement in developing countries due to its developed background, but it is such countries where the water stresses are already at hi gh stress levels and expected to worsen from most through the predicted population growth and climate change pressures (UNESCO 2009). Only time will tell how useful and politically favoured RBM is in addressing the crisis, and whether it is continued to be used alone or alongside other water management concepts cuch as international virtual water sharing.