BMW: Case Study Essay
Searching for BMW case study essay to get inspired? Look no further! This BMW marketing
strategy case study analyses the company’s strategic management and the approach to customer
segmentation.
Introduction
BMW is one of the most recognized brands in the world. It is at the echelon of the automobile
industry, producing products that are known for a combination of quality, utility, and style.
Customer segmentation is a management factor that all companies should consider in their
marketing strategy. This case study analysis attempts to examine the BMW brand and its
approach to market segmentation to expand its automobile sales.
BMW Case Study Summary
BMW developed into an international automobile company after World War II and achieved
tremendous success by the mid-20th century. In 2012, it had international sales exceeding $106
billion (Kotler & Keller, 2016). The BMW is an instantly recognizable symbol, a tribute to the
company’s early days as an aircraft manufacturer. Originally, BMW attempted to appeal to baby
boomers, producing sports sedans that were luxurious and demonstrated high performance.
This became the 3, 5, and 7 series which were a similar design in different sizes. At the beginning
of the 21st century, as consumer needs shifted, BMW began to introduce a wide variety of other
vehicles, ranging from premium SUVs to convertibles and roadsters, as well as cheaper compact
cars in Series 1. BMW offered options to family-oriented consumers, wealthy conservatives that
sought luxury, and those needing bigger cars for outdoor activities, as well as those seeking highly
flamboyant vehicles.
BMW Case Study: Defining the Issue
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BMW utilizes various advertising tactics and methods but has continued to employ the tagline “The
Ultimate Driving Machine” since 1974. It has seen a steady increase in sales in the US and
focuses on emphasizing quality rather than status. BMW consumers usually demonstrate loyalty,
but the company seeks to attract new customers. The marketing issue for investigation is whether
BMW adequately segments the consumer base and how well it employs marketing to each group.
BMW’s marketing strategy will be examined, and recommendations provided for potential
improvement.
Consumer Segmentation
BMW generally uses a mono-segment marketing position that appeals to a single customer
segment of relatively wealthy individuals. Most of the automobile lineup which BMW offers consist
of luxury vehicles, and even its Series 1 is priced at the higher end of the mid-range sedans. The
company simply does not offer budget vehicles that may be appealing to individuals and
households with income below the upper-middle class. Despite this, BMW most likely uses a post-
hoc segmentation approach which analyzes marketing data after sales to determine its customer
clusters and category management. Segmentation is based on consumer preferences, which
consists of product evaluation.
In an automobile, this includes aspects such as price, performance, ecological features, and
reliability. These help to shape criteria that are used during automobile selection. The preferences
are vital in constructing the additive value function which is a major method of determining utility
for various customer segments (Liu, Liao, Huang, & Liao, 2018).
As mentioned in the case study, BMW offers a variety of cars that may fulfill the distinct needs of
its consumers. Each of the car types it offers such as sedans, SUVs, or roadsters all have several
vehicles in the series which gradually increase in price and feature offering. BMW actually
segments the premium market by finding a balance between purchasing behavior and marketing
mix and responding appropriately to value and consumer trends. However, the brand does not
compromise and cater to most segments but adopts a marketing strategy that focuses primarily on
a premium target market (Yuying & Qingrun, 2018).
The primary consumers of BMW vehicles are men aged 30-50 with higher levels of income. This
segmentation works for BMW as it attempts to maintain its status as a luxury car manufacturer.
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With BMW combining luxurious superiority with performance and reliability, the company positions
itself to appeal to upper-class customers that will appreciate the masterpiece and symbolic nature
of its highly technological automobiles. Therefore, BMW establishes a particular value to its
product which is reflected in both pricing and marketing strategy.
BMW Marketing Strategy
BMW focuses its marketing efforts primarily on premium segments with the purpose to define
luxurious brand identification of its vehicles. The focus on affluent customers in the majority of its
marketing for the 3 through 7 series has demonstrated the success of this approach. BMW
positions itself as a leader in the industry through innovation. This may range from clean energy
engines to complex electronic systems in its cars. The company builds its value and competitive
advantage on the innovation concept which is reflected in its global marketing strategy (Dong &
Koo, 2018). In other words, the development effort, components, and performance that is input
into BMW cars are reflective of its value, justifying such price tags.
The luxury product market continues to demonstrate significant growth year over year, despite any
economic downturns in the last decade. Premium vehicles such as BMW base their segmentation
and marketing on the concept of scarcity.
Consumers purchasing luxury products are buying into the dream and exceptional quality. BMW
takes advantage of this by adopting a “masstige” approach, combining the prestige of its
automobiles with mass marketing strategies to achieve a high level of sales. Premium products
directly impact the psychological concepts of self-esteem and social recognition. The consumption
and possession of premium brands are associated with pleasure and a range of other emotions
which consumers pursue as part of increasing or upkeeping their social status (Chandon, Laurent,
& Valette-Florence, 2016).
Based on this, BMW began to test a new slogan of “sheer driving pleasure” in limited markets to
attempt the transition of marketing focus from performance alone to the emotional appeal of its
luxury brand. While the iconic “ultimate driving machine” may be successful, it may be viable for
BMW to eventually change its slogan. The current slogan appeals to its primary demographic of
wealthy men but fails to capture other market segments such as women, young adults, and those
without such great enthusiasm for cars. The emotional marketing approach is closely relatable
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with individualism, a coveted value for United States consumers.
Emotional paradigms contribute to the cultural entourage and social constructs of a vehicle (Lutz,
2015). By integrating its quality and performance into emotional marketing, BMW can capitalize on
its widely known brand and enhance consumer communication. BMW can improve its marketing
strategy and adopt new consumer segments by combining emotionally sensual marketing with
premium performance. The two concepts are inherently synergistic and would allow for BMW to
maintain a leading position in the industry.
BMW Case Study Solution &
Recommendations
In addition to using the emotional marketing appeal, BMW should seek to expand its consumer
segments. This is particularly important in light of potential economic downturns and expansion
into developing countries where average incomes are significantly lower than BMW’s primary
markets of North America and Europe. One recommendation would be to expand its lineup to
include more budget-oriented cars that maintain a similar level of quality, safety, and performance.
This would be in line with BMW transitioning its focus from class to performance as mentioned in
the case study.
It would attract a significant market segment from middle-class households who would now be
able to afford a BMW automobile which does not sacrifice much in terms of performance, only
luxury. However, this decision should be taken into consideration of the long-term commitment of
the company since it would dilute the premium status of the BMW brand. Even now, driving one of
the cheaper series of BMW is considered far less prestigious than its luxury sedans. Expansion
into new segments will present challenges with both advertising and competition.
BMW should keep track of changing consumer trends, diversity, and social opinions, basing its
advertisement strategy on appealing to a wide variety of the market, even those that may not be
able to afford its cars. The BMW brand image is distinguished and synonymous with prestige,
quality, and performance. The company’s further strategy should encompass significant
investment into technologies such as clean energy and self-driving cars, and reflect this in their
marketing campaigns which position BMW as an innovator in the industry.
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Conclusion
BMW is a global automobile brand that produces and sells premium-level vehicles. Its primary
consumer segment consists of affluent individuals and the car lineup is designed to meet the
demands of this market segment. BMW bases its marketing strategy on innovation and
performance, taking advantage of its luxurious brand name to emphasize quality and scarcity.
While this marketing strategy has been successful, it may be viable to modify the approach by
using emotionally sensible marketing and introducing low-end vehicles with a similar level of
quality in order to expand its consumer segments.
References
Chandon, J.-L., Laurent, G., & Valette-Florence, P. (2016). Pursuing the concept of luxury:
Introduction to the JBR special issue on “Luxury marketing from tradition to innovation.” Journal of
Business Research, 69(1), 299-303. Web.
Dong, H. B., & Koo, J. (2018). Conspicuous and inconspicuous luxury consumption: A content
analysis of BMW advertisements. Reinvention: An International Journal of Undergraduate
Research, 11(2). Web.
Kotler, P., & Keller, K. L. (2016). Marketing management (15th ed.). London, England: Pearson.
Liu, J., Liao, X., Huang, W., & Liao, X. (2018). Market segmentation: A multiple criteria approach
combining preference analysis and segmentation decision. Omega, 83, 1-13. Web.
Lutz, C. (2015). Marketing car love in an age of fear: An anthropological approach to the emotional
life of a world of automobiles. Etnografica, 19(3), 593-603. Web.
Yuying, A. & Qingrun, R. (2018). Global marketing strategy of BMW. Web.
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