Branding And International Marketing Strategy Of BMW

BMW Products and Pricing Strategy

Branding is a marketing term and it means a collection of images and concepts that show a product or company. Branding is important as it can serve to help the people to connect with name, image and symbol with an organisation. In this study, BMW organisation is chosen to show the branding and international marketing strategy. In this study, there are two questions; the first one is associated with the effectiveness of the organisation’s current branding strategy particularly based on the brand equity models. The effectiveness of BMW’s current branding strategy with impact to Aaker and Keller’s theories of brand equity is discussed. The second question deals with the international marketing strategy of BMW. In this part, standardisation and adaptation to the international marketing mix of BMW are also given.

a. Brief description of organisation BMW

BMW is a German multinational organisation that produces motorcycles and automobiles. BMW has been produced aircraft engines since the year 1945. BMW is in the automobile industry. BMW produces motor cars in China, India, Brazil, United Kingdom and Germany and in the United States. Automobiles are marketed under the company BMW, Mini and Rolls-Royce (BMW.com 2018). Competitors of BMW are Audi, Mercedes Benz, Volkswagen, Honda Motors and Porsche. BMW has been working on producing the cars which are environment-friendly, completed the journey low annual oil service, completed micro-filter services, completed brake fluid service and completed vehicle check.

b. Brief description of the marketing strategy 

BMW sells the cars category of Luxury, SUV and Sedan. BMW sells the BMW 3 series, BMW 7 series, BMW X3 and BMW x5. The tagline of the BMW is the ‘sheer driving pleasure’. The USP of the organisation lies in the technologically advanced and luxurious products portfolio that can deliver ultimate driving experience. BMW mainly targets the luxury segment cars for the affluent customers. Target customers of the organisation are rich professionals and affluent families. BMW positions itself as technologically advanced and eco-friendly advanced company that inculcates the innovation in the products to provide a stylish driving experience. 

c. Brief description of their marketing mix

Product: BMW focuses mainly on the manufacturing of the high luxury cars and two-wheelers. These products are manufactured with certain facilities across the globe with each segment. BMW products are personalised and the majority of the products are standards across the countries (Bmw.com 2018). The cars undergo a process of technological advancement and cars give high safety and performance.

BMW Manufacturing Facilities

Price: BMW keeps premium pricing for the luxury cars. Premium pricing strategy provides the organisation with high gross margin and it makes the cars desirable for the customers. BMW sometimes adopt the dynamic pricing strategy for entering in new market like Brazil and India.

Place: BMW is world-renowned car manufacturer organisation and it spreads the manufacturing facilities to many of the countries. It produces cars in Munich and in other parts of the world. BMW has manufacturing facilities in more than 10 countries and it goes for global reach taking the strategy of dealership to the premium car sellers.

Promotion: BMW does promotions through advertising through out-of-home medium. BMW advertises on televisions and social media also. It sponsors the club footballs and in events. BMW has social networking pages on Facebook, Instagram and Twitter.

d. Brief statement of their financial and marketplace performance

BMW performed better during the period of 2011-2016 and in the year 2017, BMW Global developed at lower speed up only 3.7% with 2.07 million sales. Regional level scored up only ion ASEAN countries; almost +16.6% (BMW.com 2018). Low performance has been observed in North Africa (-20.0%), Pacific region (-13.2%) and in East Europe (-24%).

BMW Group	2013	2014	2015	2016	Charge
Profit before tax (in € million)	7,890	8,708	9,223	9,665	4.7
Revenues in € million	70,228	70,603	75,174	86,225	1.0
RoE in %	20.2	19.4	20.2	21.2	1.0
Capital expenditure (€ million)	6,711	6,100	5,890	5,832	-1.1
Depreciation and amortisation	3,721	4,712	4,654	4,809	3.2

Table1: Financial performance figure of BMW

(Source: Bmw.com 2018)

Branding is the marketing practice that creates name, design and symbol which identifies and differentiates the brand or product from other products or brands (Cifi et al. 2016). The author further stated that branding is the promise to the customers as it tells the customers what exactly they can expect from the brand or products. On the other side, as stated by Keller (2017), brand is the image or idea of specific service or products that consumers can connect with by recognising the names, slogan, name or design of the company. Branding is done for the customers to become recognisable by more customers.  

Brand recognition is one of the components of brand awareness and brand recognition is the ability of consumers to identify one brand over the other service and products. According to Keller (2017), recognition reflects linking or familiarity acquired from the past exposure and remembering of one brand than the other is called recall. Brand recognition is the ability of the customers to identify the service or products by its features and attributes. The goal of the brand recognition is to attract the potential customers to identify the services or products. BMW enjoys high brand awareness and recognition as its styling features and seating capacity make the brand exceptional. BMW stood third in 2017 in Best Business Brand in Europe by Das Deutsche Market Ranking.   

BMW Promotions and Advertising

Brand identity is the how a business presents itself and how the business wants to be perceived by towards the customers (Seo and Buchanan-Oliver 2015). Brand identity is related to the intent behind the branding and it is the way an organisation chooses its symbol, logo and colours. In Keller’s model, brand salience is about the process of making the brand stands out and it is the way customers can recognise the brand. Aaker told the brand awareness is trying to ensure about the brand perception must be correct for the customers. BMW uses the slogan ‘the Ultimate Driving Machine’ and it associates rational interpretation and it goes towards the emotive formula; the ‘pride’. BMW’s famous logo is also an identity for the organisation. Logo shows white propeller blades and a blue sky that represents the manufacturing history of military aircraft engines (Bmw.com 2018). BMW is premium and automobile manufacturer and brand recall is 60% almost where brand recognition is 90% in upper class.

Brand positioning is the marketing strategy aiming towards to make the brand gather a distinct positioning relative towards competing brands within the minds of the consumers. Organisations apply the brand positioning strategy by emphasising elements of the brands through promotions or advertising (Arrigo 2015). In Keller’s model, brand response is about customers’ respond to the brand and how the brand makes them feel. It is associated with the quality of the products, credibility of the brand, consideration and superiority. Perceived quality is the viewpoint of the customers about a service or product both interns of competition of the perceived quality of competing offering. BMW does aggressive styling commercials and they show the customers on Television and internet to feature with dramatic music and dense forest scenery. The customers find the vehicles are tough and it earns ethereal brand position. 

Brand personality can be defined as the set of characteristics of the human beings that are featured to the brand name. The customers can relate to the brand personality and effective brand can increase brand equity through producing consistent set of traits (Theurer et al. 2018). Brand archetypes are the collective-inherited unconscious idea about the pattern of thought, data and image and these should be universally acclaimed. There are twelve types of archetypes; innocent, explorer, sage, hero, outlaw, magician, everyman, lover, jester, caregiver, creator and ruler. BMW uses the archetype of ‘hero’ as its advertisement always shows how tough the vehicles are and how easily it can drive (Kotabe and Helsen 2014). It is the sense of luxury and premium quality.

Brand Equity Model of Keller

Brand affinity is valuable and enduring level of relationship with the customers and it mainly based on the mutual belief between company and customers that share common value (Geyskens et al. 2018). Brand resonance is the top of the brand equity pyramid as it is the most desirable place to reach. Brand resonance has a few categories as the customers must have behavioural loyalty, sense of community, active engagement and attitudinal attachment. BMW has reached that level when the customers feel a psychological and deep bond with the brand. Loyalty and emotional attachment of the community (mainly upper class) and it has good engagement with customers as well (20 million likes on Facebook). BMW sells luxury cars with high pricing segment, therefore, the cars are of good quality and customers like the brand. The customers are satisfied and there is no switching cost; the customers are loyal.

 

Figure 1: Keller’s Brand Equity Pyramid model

(Source: Keller 2017)

Brand Equity model of Keller tells the process of building the brand equity through understanding of the customers.

Level 1 is the brand identity and it is the process the customers look up to the brand to distinguish one brand from the other. As stated by Keller (2017), it is the process the brand recognises itself in the mind of the customers. Many of the organisations spend billions to create the brand identity online even before they start making profit.

Level 2 is brand meaning and it is the process the organisation tells about the brand. When the customers aware of the brand; eventually, they want to know more about the brand name and products. The brand meaning has two parts, brand performance and brand imagery.

Level 3 is brand response and this stage is about customers’ response to the products and services. This positive experience can generate good feelings about the brand among the customers. Brand response level is associated with the experiences of the customers between judgement and feeling (Etkin et al. 2015).

Level 4 is brand resonance and it is the strong relationship with the customers. Not all the brand can reach this level as the brand needs to make several psychological and social levels before reaching this. This level is associated with behaviour, values and attitude, engagement of customers and connection and feelings.

Brand Loyalty

Brand loyalty is the measure of customers’ attachment to the brand. Aaker stated that the core theme of the brand equity is depended on the customers’ loyalty towards the brand. Brand loyalty is the extent to which the customers are loyal to the brand (Marquardt et al. 2017). If the customers switch to another brand very easily, especially when the brand makes a change in the product concept, price and features of the products; then the brand loyalty is low of the brand.

Brand Identity and Meaning

Brand Awareness

Brand awareness is the extent to which the customers are able to identify or recall of the brand. Brand awareness can be the key consideration to the consumer behaviour, brand management and advertising management as well as strategy development. According to Mogliner et al. (2018), the customers’ ability to identify the brand is the key consideration of the decision-making.

iii. Brand Associations, including Perceived Quality

Brand associations can be defined as the set of qualities to remember that assist the customers to communicate ideas and information to the customers. These qualities must be differentiated with another brand in order to gain the competitive advantage. As stated by Aaker (2014), perceived quality is the purchaser’s perception of the products or services as customers make up the mind about if the products or services can match the qualities they perceive.

International marketing is the application of the principles of marketing to more than just one marketplace or country. As stated by Papadopoulos and Heslop (2014), international marketing means to market activities integrated and coordinated across multiple country markets. The outcomes of the global approach of an organisation are the international marketing and the organisations need to focus on the customer groups, physical location and managers’ concentration on product market. International marketing mainly focuses on the leveraging of the organisation’s assets, products and experience globally. 

An organisation goes international market to increase sales by expanding the business globally will automatically increase sales. Internationalisation helps to improve profit for the organisation and it is the common practice for the short term-security. The international market allows the organisation to adore the innovation as well as exclusivity (De Mooji 2015). International market helps to expand the business with services and products; it can help the company to achieve greater scales of the economy from the smaller domestic market.

1. Ethnocentric: This orientation allows the organisation that the products, techniques and the marketing strategies are applicable in the home market equally with the overseas market as well. BMW does the all foreign marketing operations from the home base with little difference in product formulation, distribution and promotion. BMW generally depends on the foreign agents as well as export-import market agents in order to export the sales.  
2. Polycentric:In this orientation, an organisation can attempt to organise the foreign marketing actions on country to country basis. The organisation targets each of the country as separate entity and individual strategies work-out. Polycentric orientation will be suitable for the organisation that does serious international market and the organisation must have resources to invest (Samiee et al.2015).

iii. Regiocentric: The organisations accept the regional market process and policies that cover the group of countries that have a comparable marketplace. The marketing strategies in regiocentric orientation are set as entire strategy, not for just one country perspectives (Mathews et al. 2016). Distribution process will be served for the whole region with close-control and economy of operation.    

1. Geocentric:In this orientation, BMW needs to accept the operations to be global. Therefore, BMW has the manufacturing and distribution process across the globe to serve much international and regional market. This process is complicated; however, this process is well-coordinated.

Standardisation strategy means to the uniform representation of all the sides of the products, rice, place and promotion around the world. In case of standardisation of the products, the organisation can use the same product name, packaging material regardless of the location. Standardisation practice sets the identical features of the particular service or goods (Shams and Huisman 2016). On the other side, adaptation aspect is changed, as well as special modifications, can be made to adjust each market. Adaptation marketing strategy will be used where new products or services can be modified.

	Standardisation	Adaptation
Pros	Faster set up time Economies of scale Excellent communication and monitoring	Excellent local present Customers can keep the landmark Respect local expectations and specification
Cons	Possible loss of effectiveness of advertisement (Brewster et al. 2016) It can make negative reaction Little creativity with flexibility	Time-consuming Higher cost The poor speed of execution Customers’ desires need to know

Brand Response and Resonance

Table 2: Difference between standardisation and adaption

(Source: Self-developed)

	Standardisation	Adaptation
Products	BME Luxury cars	Dual adaptation (communication and product) (usage and positioning requirements differ across countries)
Price	Luxury cars with premium price	In Asian countries, it lowered the prices
Place	Stores and dealership	Does not go to the automobile distributors, however directly appoints showroom dealers (lean distribution)
Promotions	Brand name and social media	Luxury and craftsmanship is promoted through sponsorship in some regional sports

Table 3: Comparison of the marketing mix of standardisation and adaption

(Source: Self-developed)

 

Figure 2:  Global integration and market responsiveness

(Source: Hollensen and Moller 2017)

Glocalisation refers to the matter where in order to manufacture products for the market of diverse customers; it is very much necessary for the producers to adapt to particular characteristics for the envisaged set of customers in the foreign market. As stated by Hollensen and Moller (2017), Glocalisation is the simultaneous occurrences of both particularising and universalising tendencies in contemporary political, social and economic systems. In addition, the concept of glocalisation shares challenges simplistic conception of process of globalisation as linear expression of territorial scale. The consequence of both LSEs and SMEs are the action-oriented approaches where the organisations can use the strengths of both approaches. The term ‘glocal’ strategy has been come to reflect as well as combine mainly two dimensions, globalisation and localisation. The organisations; globalisation approach reflects about global integrated strategy and it recognises the significance of local adaptation as market responsiveness. Glocalisation tries to increase the balance between adaptation and standardisation of the organisations’ international marketing activities (Kaklanis et al. 2016). The forces of global coordination’s are associated to the removal of trade barriers, relationship management and the global accounts of the customers as well as standardise worldwide technologies. The organisations can take the strategies of worldwide market and they can make a global village through worldwide communication. Forces of market responsiveness are associated with the cultural differences, regionalisation and deglobalisation trends. 

1. Product:Products of BMW are mainly BMW, MINI and Rolls Royce. BMW is engaged in manufacturing and developing of the vehicles those are world class. BMW maintains differentiation strategy through creating 13 R&D centre across the world in developing the vehicles and making the design (Atasu et al. 2018). BMW is famous for high level of integration of the digitalisation with vehicles.   
2. Price: BMW takes the premium pricing technique and the customers have high degree of reliability on the vehicles of BMW as the brand use high level of capabilities and features integrated into the vehicles. BMW uses product-line strategy and they charge different prices for their different models.

iii. Promotion: BMW’s brand perception is high among the customers. It has take years to create high brand perception among the customers. BMW uses amazing YouTube and Television commercials that show pride of the brand (Dickson and Ginter 2017). It takes out-of-home advertising and social media marketing. BMW does sponsorship of sports events and taking brand ambassadors as celebrities.

1. Place: BMW has its dealership in more than 150 countries and the current dealership may cross 6,000. Worldwide distribution comprises of 140 Rolls Royce, 1,550 MINI and 3.310 BMW (Atwal and Williams 2017). BMW takes lean distribution so that the vehicles reach the customers easily.
2. People: BMW has dedicated service staffs render services in showrooms and trade centres to provide maximum satisfaction to the customers. BMW provides the employees retirement benefits, insurance benefits and vacation benefits. In the year 2017, numbers of BMW employees were 129,332 (Fournier and Srinivasan 2018).
3. Process: BMW offers uniformly service delivery right time to the customers. Digitalised online marketing influences the customers purchase decision-making. BMW produces Rolls Royce for each individual customer after they get the order. BMW tries to deliver the value through all elements, product, place and price.  

vii. Physical evidence: BMW has more than 6,000 dealerships and it has its showrooms in more than 150 countries. It has it headquarter in Munich, Germany. Extended dealership across the world and showrooms are designed for the brand recognition and luxury feelings.  

Conclusions 

 It has been observed that branding concept is about pull; not the push. Branding is the expression that tells essential truth and marketing of the organisation sells the products and services through branding. Marketing sets the communication characteristics, attributes and values which clarify the branding. International marketing is strong for BMW as it has stores and dealership in more than 150 countries. The branding of BMW helps the brand to reach wider audiences and premium pricing helps the brand to have upper-class audiences. BMW uses it strong branding to build the marketing campaign which works for its brand positioning strategy.  

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