Executive Summary

In this report a marketing plan is formed for BMW Automobiles in UK, the report starts off with a short introduction to marketing and the company. BMW is a leader in the premium luxury car market in the UK; the company has shown increasing sales in the last two years and has almost 10% of the UK car market share. The reason for this success is the diverse range of cars that BMW has to offer. It consists of the BMW brand, Mini and the Rolls Royce. However all three of them are successful products of BMW Automobiles and are discussed in this report; more focus is given to the BMW brand. The reason so far for the success of the company is their accomplishment in the companys core strategy, product development. BMW over the years have created cars and successfully launched them into markets, but times are changing now as competitors like Mercedes are getting into new markets and trying to win new consumers. BMW has to counter such moves by sticking to its core strategy yet entering new markets. This is the way the company is going to achieve its mission of becoming the the world leading provider of premium products and premium services for individual mobility by 2020.

Introduction to Marketing
Marketing is something that affects every one of us every waking moment of our lives; it is the management process for identifying, anticipating and satisfying customer requirements profitably (Chartered Institute of Marketing)

Introduction to the Company

BMW (Bavarian motor works) is a German automobile, motor cycle and engine manufacturing company which was founded in 1917. The majority of the stake within the company is owned by strategic investors from all over the world. BMW is mainly seen as a premium luxury cars manufacturer targeting the rich and upper class society.

Corporate Objectives:
Corporate Objectives are simply what the business wants to achieve, they are those that relate to the business as a whole. They are usually set by the top management of the business and they provide the focus for setting more detailed objectives for the main functional activities of the business. BMWs corporate objectives are also simple and clear, they want to achieve a earning before interest and tax margin of 8% in 2012, which is similar to the one they achieved in 2011. Moreover the company wants to achieve a return on equity ratio of 18% in the financial year 2012 (source BMW blog). The other long term aims of the company are to have efficient dynamics in all cars by 2020 and to be the world leading provider of premium products and premium services

for individual mobility by 2020, the latter is also the mission statement of the company. (BMW Annual Report)

Marketing Audit
Macro Environment (PESTEL) The macro environmental factors of an organization are the external and the non controllable aspects of an organization, which can be best, understood by using the PEST analysis. BMW is a vast organization and thus a vast majority of external factors affect the running of the company which are discussed below Political: In the recent past the UK and EU laws have recognized the fact that the car industry is a major contributor to the emission of Co2 in the environment, recent studies have shown that 22% of the overall Co2 emissions have been caused by road transport of which 92% are from cars. This has had an immediate impact on BMWs automobile industry. The pressure of governments for greener technologies and environmental friendly cars has led BMW to invest in such technologies, although this has raised the manufacturing costs for BMW, it has also created a positive image in the minds of its customers by reducing the carbon foot prints which is created on the environment. This has led to BMW launching its first car running on hydrogen in 2007, which produced very less Co2 emissions. This greener image is also being made prominent by the new engine technology called the Efficient Dynamics, which BMW launched recently.( BMW BLOG) Economical: The recent financial crisis has had a huge impact on all businesses throughout the UK, consumer purchasing power has fallen significantly this is the reason why in 2008 BMW had a profit before tax of 351 million Euros whereas in 2011 the profits have increased to 7.3 Billion Euros.( Annual Report 2012) However In the UK the recession is still growing stronger, as the country is facing is facing its first double dip recession since 1975 so it is likely that these rising profits will come to a fall. (Daily mail) The second major factor regarding BMW economical climate is that of rising oil prices, last month a barrel of crude oil had soared up to $122. This has raised the cost of sales for the company as it has risen by 9.5% when comparing the 2010 and 2011 financial statements. However it is worth mentioning that profits for BMW automobiles has increased by 75% in comparison with 2010. (Annual report 2012).

Lower interest rates in the UK are significantly affecting the consumers savings which is going to have an impact on BMW as the less the consumers will have to spend the lesser the sales for BMW, this is the reason why many economist and financial analysis predict a fall in sales for luxury items in 2012. (The World in 2012) Social Hofstede (1980) defines culture as the collective programming of the mind which distinguishes the members of one human group from another. The UK population is expected to be increase by 8 million by the year 2029 when in comparison to 2012. The breakdown of this increase shows that the population is shifting towards more life expectancy and thus to an older generation. This shift will cause BMW to ponder upon its green technologies as the consumer will likely prefer a greener environment. (Market Oracle) Technological Technology has driven many aspects of societal development, business and marketing over the centuries, however the technological revolutions of the last 100 years have also led to the demise of various industries. For e.g. the typewriter has ceased to exist. BMW has to constantly look after these changing environments, the BMW efficient dynamics is doing well in the markets but the organization should always be ready for change and one step ahead of its competitors. Recently Mercedes Benz launched an advert of its invisible car, which emits zero emission and Mercedes equipped one side of the car with sheets of LEDs that show streaming images captured by a Canon 5D Mark II camera attached to the other side of the car. The car blends into the background, making it nearly invisible. Although the car will not go in production until 2014 but his promotional campaign has caught attention of consumers throughout the world. BMW should critically analyze this situation and improve its efficient dynamics and hydrogen fuelled cars to respond to this technological advancement. (News. Discovery 2012).

Internal Marketing Audit

The micro environment can be best described as the environment that is most closely linked to the organization (Grocutt 2004) The internal environment of an organization can be best understood by using the Porter five forces model.

Threat of New Entrants- Low The Automobile industry requires high amount of capital expenditure for a new organization to enter the market. BMW has a strong foothold in the market and is unlikely that it would be worried about new entrants to the market as BMW holds both tacit and explicit knowledge of the market which no new organization would gain early. Threat of Substitute Products- Medium BMW customers are loyal to the brand, the ones who are using the BMW cars shall not be willing to switch to competitors as they are used to the drive and comfort of BMW, However people now have become health conscious and some consumers may in fact find walking more beneficial for their health and just taking public transport to get to work. Bargaining Power of Customers- Medium Individual customers can gather a lot of information about the production price of a BMW and can thus negotiate prices. On average a BMW car cost 50% of its market retail price. (Guardian 2009) Bargaining power of suppliers- High The reason that supplier power is high because BMW relies on quality products from its suppliers making BMW so valuable, moreover supplier switching cost is high. Secondly BMW follows Just in time production so good relations with suppliers are very important for the company. Competitive Rivalry Within the industry- High The automobile industry is one of the most competitive industries, the reason being that the industry has low market growth rate. One of the fiercest rivals for BMW in the UK is

Mercedes and the Volkswagen Group. Moreover the exit cost for car manufacturers are also very high which maintains the competition within the industry. BCG Matrix BMW has a number of successful and unsuccessful cars within their automobiles section. The most famous and long running is the BMW 3 series. Since 1975 when it was first launched, it has been produced in six different generations and in no fewer than five different body styles. It is BMW's best-selling model, accounting for around 30% of the BMW brand's annual total sales (BMW BLOG) To analyze the portfolio of cars that BMW has to offer in the UK, the best way is to use the Boston Consulting Group Matrix.

STARS 5 series X Series

QUESTION MARKS

CASH COWS 3 series 7 series

DOGS 6 series

. According to this matrix business and its products can be classified as high or low according to their industry growth rate and relative market share. BMW BCG matrix shows that Star product for the company is the BMW 5 series and the X series. The new BMW 5 series is highly successful in the UK market. Its market share growing from 15% to 28% in 2011(High Market Share). This market segment in which 5 series belongs to is the major segment of the UK luxury car industry (High market growth)

The Cash cows are the evergreen products of BMW, the 3 series and the 7 series. The 3 series accounting for the major chunk of the BMW UK revenue approx 30% (High Market Share). However the market which this car belongs to does not show signs of growing. Finally the Dog is the 6 series, which has failed to achieve the targets for which it was produced. The reason being that their competitors car like the Porsche 911 is much better in performance and design in comparison with the BMW 6 series.

SWOT Analysis
The concept of the SWOT analysis derives from the work of Andrews and others at Harvard University (Andrews 1986). It analyses two distinct areas, the organization and the environment in which it operates. For any organization to be successful the company has to identify its own strengths and rectify its weaknesses, as both of them are internal to the company. Opportunities and threats are external to the company and necessary steps should be taken to counter these external factors. For any marketing plan to succeed a SWOT analysis is quite important, for BMW it as below Strengths Diverse Range of Products The BMW automobile sections have a diverse range of cars. The BMW, the mini and the Rolls Royce which BMW acquired in 1998. Research and Development BMW spends about 5.5% of its revenue on research and development; this is the reason why BMW has become one of the leaders in luxury car industry. Most of its research and development is directed towards environment friendly and efficient cars. Their research has led to the company producing the BMW 320d Efficient Dynamics Edition which is currently powered by a 163 hp four-cylinder diesel engine with an average fuel consumption of just 4.1 liters/100 km and a CO2 emission level of only 109 grams per kilometer. (BMW group 2012) BMW has a strong brand image; the main reason behind this success for the company is their core strategy of product development. Weaknesses One of the major weaknesses regarding BMW is that the prices of its cars are too high, it is not affordable by the common man, and moreover the people who own a BMW find it rather expensive to maintain the car due to high maintenance cost

Competitors like Toyota and Mercedes have better and vast production and distribution lines in comparison with BMW Opportunities BMW has set a target market and an image as a luxury car manufacturer; but in recent times the UK and most of the other countries of the world have been hit by recession, during this time its hard for many consumers to afford BMW luxury cars , so the company can diversify its product lines and introduce new compact or family cars which are affordable by the middle class of society as well. Expand into new markets, where the company has been not performing well. Although BMW directs its funds in researching new technologies for its cars, the company should specially focus on environmental friendly technologies as more and more customers are aware of corporate social responsibility Threats BMW has a 10% market share in the UK auto manufacturer industry, where as its main competitors the Volkswagen Group and Porsche have 19.6% of the market share, compared to last year Volkswagen had a market share of 17.6%, if the situation continues then there is a possibility that the market will be dominated by the group. Moreover the current volatility in the oil and fuel prices has been a problem for both consumers and the BMW group as well. For the consumers its an added expenditure and for the company it results in higher cost of sales due to higher transportation costs. Once an organization has established its strengths, weaknesses, opportunities and threats; it can develop the SWOT further through matching and conversion (Groucutt 2004) In the case of BMW the company can match its strengths against its opportunities, for example as previously mentioned that BMW spends a huge chunk of its revenues on research, what the company can do is to direct most of its research into how to make smaller and more efficient cars for the middle class society as most of the consumers are not able to afford the current premium prices of BMW cars. If the company can in some way accomplish this, it will result in elevated sales in the UK and globally as well. BMW recognizes the threat of volatility in the oil and fuel prices and has thus launched its Active Hybrid 5 car which is better than the previous hybrid cars and has a better fuel-electric consumption than its predecessors. The car can accelerate on electricity alone. (Car and Driver). Over here it can be seen that BMW has countered this threat by its biggest strength which is its diversity and product development.

Marketing Objectives
Marketing objectives are: marketing goals that the business must achieve in order to meet its wider business objectives In order to consider the marketing objectives of BMW it is first preferable to see a pie chart depicting the market share of BMW in the UK in comparison with its competitors.

As seen from the chart, BMW has a 10% market share in comparison with 19.6% of BMWs biggest competitor Volkswagen. According to BMWs mission statement, the company wants to become the market leader in premium products and services by the year 2020; this is the corporate objective of the company and the following marketing strategies will help the company get there. Differentiation Porter (1985) suggests that there are three fundamental approaches through which an organization can achieve sustainable competitive advantage, cost, differentiation and

focus. In the context of BMW a differentiation strategy is the most preferable as the organization knows its products and services possess several attributes that are unique in the minds of buyers. Cost leadership and focus strategy are not useful for BMW because neither does BMW make cheap products in which it case it could take up cost leadership nor does the company has a small portfolio of products in which case a focus strategy could have been adopted. Product Development Ansoff (1987) is a portfolio analysis that examines the organizations activities within existing markets and potential markets with current products and new developments. In the case of BMW both market and product developments are suggested for the long term success of the company. Product development is when the company launches new products into existing markets. BMW already has a rigid product development process in which every manufacturing stage of the product is evaluated and audited and then sent to the other stage of the process. One of the main centres of BMW product and research development is the Engineering Centre (FIZ) in Munich. (AutoInTell News) The organization already researches and then produces one of the finest cars in the world by the use of such centers, but for the long term success of the company and to become the market leader there is much to me done. In regards to sustainable and environmental technology BMW is somewhat behind its competitors, for e.g. Mercedes. Recently they launched a campaign of the Mercedes Invisible Car, this promotional campaign was quite successful as many consumers were fond of such a car with zero carbon emission and a car which is practically invisible to the environment. BMW should take note of this campaign and introduce a better yet competitive alternative to the Invisible Car. Market Development Market development is when companies launch existing products into new markets. One of the BMWs upcoming and successful markets is India, over the years the company has established a strong foothold into the market, and the company even has a plant in Chennai which makes 11000 units annually. The market for BMW in India is growing, BMW unit sales grew 45 per cent in 2011 to 9,371 units and in the JanuaryMarch, 2012, quarter, sales were at 2,369 units. (The Hindu.Com). But the thing to notice is that is that BMW is focused on the premium sector of the Indian automobile market. The company should enter different markets within India, currently The Chennai plant, makes the BMW 3 series, the BMW 5 series and BMW X1 in petrol and diesel variants while BMW X3 is made in diesel variants, no hybrid cars are made in India . The company could enter this market as environmental friendly cars attract more customers resulting in elevated revenue for the company.

Strategic Objectives
BMW sold 1.7 million cars globally in the year 2011, (BMW Annual Report 2011), out of these 1.7 million cars 196000 were sold in the UK; meaning that 11.5 % of the global

sales, even though the UK BMW market has shown an increase of 17% in comparison with 2010 this percentage has to increase if the company wants to become the leader in the UK automobile market which is currently the Volkswagen Group. This growth shall be achieved by effective marketing and innovative production.

Marketing Mix
E. Jerome McCarthy in the 1960s developed the mnemonic 4Ps which has become the most enduring of the marketing mix frameworks (McCarthy 1965). McCarthy defined the 4Ps as product, price, promotion and placement. Applying the 4Ps at BMW is as follows: Product Since its inception BMW has remained a product based organization, this is the reason why BMW has such a wide range of products. The company has three brands; the BMW, Rolls Royce and the Mini. If talking about the BMW brand the following is the current portfolio of cars the company has to offer BMW 3 series, 7 series, 1 series, 5 series, 6 series, X1, X3, X5, X6 and Z4, out of these models the best in running is the BMW 3 series; the car has collected the greatest chunk of revenue for BMW over the years. But the thing to consider while keeping these models in mind is the product life cycle. It shows the sales of the product through their useful life during different stages of their lifecycle. The stages include Introduction, Growth, Maturity and Decline. If considering the product life cycle against the portfolio of cars that BMW has to offer then it can be said that most of the BMW cars are on the maturity stage, even though the BMW X3 has high market share but the market which it belongs to does not show signs of growing as previously mentioned in the analysis of the BCG matrix. BMW has realized this and has launched the new version the BMW X3 in 2011 (BMW BLOG). BMW has to consider and place its products accordingly into the market, if most of the products of the company are going to be in the maturity stage then there will be serious problems for the company as all of them will be going into decline together. Thus constant and increased improvement into research and development has to be made in order for BMW cars enter into the growth stage of the product life cycle. In 2007 BMW launched a clip on the internet about its GINA Light visionary model, it is a fabric skinned shape shifting sports car concept built by BMW. The car is enclosed with flexible, stretchable water resistant translucent man-made fabric skin polyurethane-coated Spandex, is resilient and durable. It resists high or low temperatures, does not swell or shrink and the movement does not slacken or damage the fabric. ( DesignBoom.com) . Though the car is not for sale and thus hasnt been

introduced into the markets and is kept at the Munich museum it has caught the attention of the world when it was premiered in 2007. BMW should launch this car in the markets now using outdoor campaign and digital marketing as such mediums should be used for high value impact products. The BMW Gina can give competition to the Mercedes invisible car as both of them are new and innovative technologies and consumers are willing to pay higher prices for such innovations.

Price Price is the most important and decisive factor for a consumer in making a decision for buying a product, Pricing can have BMW although has high price range for its cars but it is certainly value for money. The price range for BMW cars is 19000 to 80000. Most of the BMW pricing strategy is based on competitor prices. For e.g. the BMW 3 series and the Audi A4 which represent the same market are loosely priced the same.

Promotion Sometimes promotion is confused with marketing; however promotion is the part of the overall marketing mix of a company. So in effect marketing means to create interest for potential customers in the companys products and services. On the other hand Promotion happens when a company offers a discount, runs an advertising campaign and links this communication to their value proposition. (Stephen Blacker). In the UK, BMW markets its product using TV, radio, press and online marketing (BMW Education). BMW also uses outdoor campaigns for branding and new car launches. The BMW 5 series was heavily advertised using outdoor campaigns, the company ran a three-week digital and poster outdoor campaign in Londons Holland Park Roundabout

and selected premium shopping centers to promote its new BMW 5 series range. (Marketing Week). Recently because of the boost in the number of internet users around the world, viral marketing has become a popular medium of advertisement. It can be delivered by word of mouth or enhanced by the network effects of the internet. Mercedes one of the rivals of BMW uses this medium very effectively, the Mercedes Invisible car campaign went viral over the internet when its clip was launched on popular social media websites including YouTube. In one month of its online campaign it has achieved over 9 million hits on YouTube. BMW should also use such techniques as it proves a very effective method in promoting its wide portfolio of cars. (Digital Strategy Consulting) Place Place includes all of the business activities involved in making the product available to target customers. BMW sells its cars through a number of showrooms in the UK and as well as from an extensive network of dealers who are provided with far-reaching expertise and knowledge from BMW.(BMW Education). Place plays an important part in the marketing mix as it refers to the ease for the customer in purchasing its products. BMW realises this but needs to improve onto this aspect by providing excellent customers services and after sales services to their customers.

Implementation
For the above ideas to be implemented by BMW, effective communication shall be required from the company within the organization and especially outside the organization to the consumers. If BMW wants to launch the GINA Light Visionary Model in order to compete with the Mercedes Invisible car; the company will have to make organizational and structural changes as the company is going away from its core strategy of product development and going towards market development by recognizing new markets. As discussed earlier about embedding viral marketing within the BMW marketing strategies, the company will have to use the services of viral marketing experts as they advise well on how to make internet clips famous within social media websites

Budgeting
Marketing budget is one of the integral parts of a successful marketing plan.

Monitoring and Evaluation

One of the best tools to monitor and evaluate a marketing plan is the balanced scorecard approach. It is a strategic planning and management system that is used extensively in business and industry to align business activities to the vision and strategy of the organization, improve internal and external communications, and monitor organization performance against strategic goals. (Kaplan and Norton). There are four

perspectives discussed in the approach which are detailed in the diagram below. (Balanced Scorecard.org)

At BMW all of these perspectives have to be taken in consideration for a successful marketing plan. Learning and Growth: This perspective includes employee training and corporate cultural attitudes related to both individual and corporate self-improvement, at BMW advanced knowledge management systems will have to be put in place for employees and high level managers to exchange knowledge. As a completer team shall be needed to launch new products and enter new markets. Internal Businesses Processes: In order for the marketing plan to succeed, it is necessary for the shareholders of the business to agree upon the plan as it is their money which is used as capital in the business. It is necessary for BMW managers to know well the processes of the company are running and whether they are in line with customers demands. For e.g. the GINA light visionary model car should be in l ine with customers demand and requirements. Customer: This is the most important perspective for an organization, as customer satisfaction should be the top priority for a company. BMW already excel in this as most of BMW customers are loyal to the brand.

Financial: BMW Financial services were established in 1992, the department supports the marketing efforts of BMW. It is very important for shareholders to have accurate and updated financial information. The shareholders at BMW who are predominantly institutional investors, should have accurate information of the funding required to implement the marketing plans (The Palladium Group)

Conclusion
BMW has a wide and diverse product portfolio; this is the principal strength of the company, the company should build up on this strength and enter new markets as well. Currently BMW has recovered from the recession which prevailed in the UK as sales from the past two years have shown gradual increase, but market stability in 2012 and further on is unsure because of the volatility in the UK and EU; as GDP growth shall go down by 0.3% in 2012 as predicted by John Micklethwait (The World in 2012). This should concern BMW as it is seen as premium and luxury car manufacturer, to counter this decline in customers purchasing power, the company should cut their costs and pass on the lower costs to consumer s in order to achieve the corporate objectives in 2012 .

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12. Market Oracle, UK population growth rate till 2030, Retrieved from http://www.marketoracle.co.uk/Article21565.html (Accessed 4th April 2012) 13. Daily Mail, UK facing its first double dip recession since 1975, retrieved from http://www.dailymail.co.uk/news/article-2067099/Double-dip-recession-Bank-Englandgovernor-tells-Britain-brace-financial-crisis.html (Accessed 5th April 2012) 14 Kaplan and Norton, Balanced Scorecard as a tool to monitor and evaluate marketing plan, retrieved from http://www.balancedscorecard.org/BSCResources/AbouttheBalancedScorecard/tabid/5 5/Default.aspx (Accessed 8th April 2012)