Effectiveness Of CRM And Promotional Strategies In BMW

Importance of CRM and Promotional Strategies

The study is aimed at analyzing the effectiveness of CRM (customer relationship management) and promotional strategies used in BMW which is one of the rarest automobile manufacturers in the world. They are headquartered at Munich and are mainly focused on customers those who look for luxury cars (Expert Market 2018). It covers two questions of which one question is focused on analyzing the CRM techniques used in BMW. Another question is based on analyzing the promotional strategies used in the BMW Company. The study also recommends few things in regards to CRM techniques and promotional mix for BMW, so that, competitive strategies could be enhanced.

The Company uses the various kinds of contemporary techniques of promotional mix. Some of the techniques are as listed below (Akdeniz, Calantone and Voorhees 2014):

– Advertising

– Sales promotions

– Internet marketing

– Search Engine Marketing

– Online Advertisements

– Social networks

As mentioned, the BMW Company uses the various kinds of modern promotional techniques; however, there are always areas for improvement which is also why competition is redefined after every innovation to the promotional strategy.

CRM normally refers to a CRM framework, software which assists with contact administration, sales management, workflow processes, and more (Navimipour and Soltani 2016).

CRM (customer relationship management) is a planned programming for different purposes like reinforcing the association with customers and furthermore making improvements to products. Many organizations across the globe have now enhanced spotlight on promoting exercises that helps to form a decent association with clients. However, it depends entirely on how effective the planning is being made to facilitate all the process related with its implementation (Baran and Galka 2016). For example, it is necessary to track the operation failure of CRM, so that, downtime could be noted. This is necessary to avoid any unnecessary payment being made to the vendor (Baran and Galka 2016).  

Market orientation is a plan of action that spotlights on conveying items outlined in accordance to client wants, needs, and fundamentals, in addition to product orientation (Wirtz and Lovelock 2017).

This means manufacturing products and services in accordance to the needs, wants, and demands of target customers. This can be best practiced with the help of CRM (Tseng 2016). For example, CRM (customer relationship management) can be used to store data of existing and new customers. The data of existing customers can help to identify several factors which customers have considered at the time of purchasing. The data of existing customers in a similar way can be utilized to identify the different other factors that customers consider and also the change in trends. Data collection in this way is a real help for meeting the needs and expectations of customers (Tseng 2016).  

Various Techniques of Promotional Mix

Customer centric is a method for working with customers to facilitate a positive interaction at the time of purchase keeping in mind the end goal to drive repeat business, customer loyalty and benefits (Thakur and Workman 2016).

This is another strategy to facilitate an interaction to customer, so that, they feel valued and builds up a temptation to return for another purchase. Customer loyalty depends much on the repeat values. For example, CRM can be used to study the factors that customers have largely considered at the time of purchase. In a similar way, BMW can identify what their existing customers look for and the expectations of new customers from the company. In this way, they can improve their business strategies in future.

Few of the CRM techniques are as listed below (Expert Market. 2018):

– Construct an inclusive screening of “customer journey” map

– Targets customers all the way through custom-built offers

– Helps produce Loyalty programs

– Personalizing the communications

– Helps review performances

CRM provides various techniques which can be used for different purposes. It can be used to track down the customer journey map, so that, such factors could be considered during the manufacturing process. The data stored in the CRM is very helpful and can be studied to construct strategies which could help to attain customer loyalty, review the performance and enhancing the communication level (Expert Market. 2018).  

BMW has gone a step further and had used CRM for smart product promotions. It appears as if the strategy is exclusive only to BMW. They have used CRM to identify the decision-making factors of the target customers. This is also why they were able to identify the business for luxury cars (Thakur and Workman 2016). The reliance on CRM for various purposes like identifying the existing customer’s needs the other areas where it could get potential customers and others.

BMW had teamed up with Legacy Lifestyle to produce luxury loyalty scheme. The scheme provides a control to the vehicle owner, so that, customers are also able to track their BMW vehicle for checking records like maintenance reports and others (Expert Market 2018). The scheme did not only bring customer close to the brand but, it actually helped people to grow with trust in their chosen brand.

The scheme looked good as it enabled vehicle owners to track their automobile’s maintenance and financing. This is due to the fact customers could relate to their selected brand and stayed with them with the same level of trust. Vehicle owners were able to register to the online portal through their vehicle ID number. This had also allowed an owner-to-owner chat facility where vehicle owners could post their query and get the necessary solution (Baran and Galka 2016). The BMW Company had integrated social media with CRM to attract more customers, especially from rural areas while they had provided a test drive of ActiveE machine. The strategy was aimed at reaching to a larger audience, especially in rural areas. They had the success that they had looked for (Tseng 2016).          

Market Orientation and Customer-centric Approach

They have also been different in regards to establishing relations with new customers. They had focused on cost involved in collecting the data and the cut back price required for processing the data as well. They had required a CRM package with which the BMW Company could do much of their tasks (Hassan et al. 2015). The extensive efforts which they had paid to designing such a CRM package had finally paid off. The CRM package has helped BMW to know its customers, their demands, expectations of new customers, and customer loyalty. CRM was being used in BMW Company to facilitate customer centric works (Expert Market 2018).

In the automotive section, the sales have grown up which is clearly evident in the 2016-17 annual reports for BMW. There was an increment of 5.3% in the sales figure of BMW cars (Bmwgroup.com 2018). On the other hand, Volkswagen’s Audi was ahead of BMW in terms of sales figure. They stood at an increment of 8.2% than the previous year which is far much better than BMW (Volkswagenag.com 2018).

The sales figure just suggests that the CRM techniques of BMW are less superior to the Volkswagen.

The sales have fallen for BMW and in 2016; the sales were behind to two biggest competitors in UK Ford and Volkswagen (Kumar et al. 2016). One of the possible reasons that have been identified is the attraction which is missing. Ford and Volkswagen were being more preferred by customers (Kumar et al. 2016). It appears that the efficiency level of BMW’s CRM (customer relationship management) has been hammered. Following is the list of recommendations which may be effective in doing the repair if at all there is a problem with the CRM’s efficiency:

• Automated synchronization with calendar is needed, so that, useful activities like client related meetings are updated. This will also help to keep the database updated in CRM
• Keeping the CRM up-to-date as this is necessary to prevent any communication related failure
• A cloud-based CRM should also be implemented, so that, senior executives and managers at different branch locations across the globe could easily access to data. In this way, they would also remain updated with the updating CRM
• R&D (research & development) needs an improvement, so that, necessary changes for CRM could be realized. This will only let them realize what amount of changes they need to the existing CRM or what more features they need now

Promotional Mix can be understood as an appropriate mixing of promotional techniques. There are various techniques available; however, all techniques may or may not be appropriate for a product or a brand (Rancati, Gordini and Capatina 2016). For example, luxury and high-end cars are advertised normally with popular celebrities.

There are various kinds of promotional mix techniques that contemporary firms use to make an introductory presentation of a new product’s launch or creating some news in media. Few of the modes are like advertising through TV, hoardings, daily newspapers and magazines. This also includes PR activities, online marketing, personal selling trade show and others.

BMW Company uses the various kinds of promotional mix techniques like media & print advertising, sales promotions, internet marketing, online marketing communications like search engine marketing, online advertisements and social networks (Akdeniz, Calantone and Voorhees 2014).

CRM Techniques and Customer-centric Approach in BMW

Advertising:

They make advertisement using media and print advertising extensively to convey their message to the target customers. However, they select the choice for specific media and print platform based on the interest level of its target customers (Kumar et al. 2016). In recent few years, the shift has been much towards the mobile media advertising and has emerged as an effective advertising platform for them. They had used WeChat which is one of the popular messaging apps in China (Kumar et al. 2016).  

 Sales promotions:

The company believes in organizing sales promotion on few occasions, probably to attract a healthy customer base. They offer short-term incentives to salesperson during such occasions. It also provides loyalty programs in major markets like North America. The company offers a USD500, USD1, 000 or USD1, 500 to repeat purchasers (Rancati, Gordini and Capatina 2016).

They had also integrated social media with the CRM to have a better relationship between the brand and its customers. This was a distinguished move from BMW as they had reached to a different level by exploring opportunities with the help of CRM. (Ryan 2016). They had also relied on pull strategy than the push. They with this strategy had intended to attract customers through mass media promotions, advertisements, sales promotions and word-of-mouth recommendations (Kumar et al. 2016).

BMW internet marketing:

The primary platform for internet advertisement was the official website of BMW. They had focused on designing contents, so that, it covers every single point like product details, offering several buying options to customers, interacting with customers, the location of online stores and promoting the core values of the company (Akdeniz, Calantone and Voorhees 2014). The website also features the language compatibility option. Customers can get a variety of resources on its official website. They can get information through of brochures, online magazines, and e-newsletters available at the official website. Interestingly, the website is innovative in a sense that it delivers the products details and other news in the form of downloadable online video games, screensavers, widgets, wallpapers and other applications promoting the brand values (Akdeniz, Calantone and Voorhees 2014).

Online marketing communications:

Following is the list of online marketing strategies that BMW adopts:

Search Engine Marketing-

To maintain healthy website traffic, BMW uses paid search marketing where they are able to post ads. They use BING and Yahoo as their paid search marketing to advertise their important contents. On just typing few keywords, the customer will be able to know much about BMW. They additionally use search engine optimization (SEO) to make its contents evidently visible to customers (Duffett 2017).

Sales Growth in the Automotive Industry

Online Advertisements-

Online advertisement channels are another strategy that BMW uses to exhibit interactive advertisements like banners, pop-ups, shoshkeles, skyscrapers, and interstitials. They do it through mobile applications and chosen third-party sites (Elena 2016).  

Social networks-

The company also uses the various social media platforms like Facebook, YouTube and Twitter to connect with a larger audience and present them the desired contents. These platforms are very popular and are good ways to reach to thousands of customers in a very less time. The desired contents include the latest news relating to the launch of a new product or other important information. They also use it to promote their core values, so that, users could connect to it (Navimipour and Soltani 2016).  

The strategies that BMW had used to promote the product are good; however, they have lagged to consider few very potential marketing modes. One of such is viral marketing and had been used by most other automobile companies like Toyota, Volkswagen, and Honda. BMW has yet to realize the importance of viral marketing (Wirtz and Lovelock 2017). They also need to take care of the website content design, so that; it could look attractive to customers.

On the other hand, they seemed to have delivered a correct set of actions with television commercials and print & online advertisement (Duffett 2017). They were also good in using television ads and have bettered all other automobile companies. They have also done well with pull factor and have used three strategies for it like advertisements, sales promotions and media promotions. The word-of-mouth has also worked in favor of the company. Additionally, they had also utilized the internet marketing in an appropriate way. The website looks innovative and provides contents that are both informative and engaging also (Sarstedt et al. 2017).

BMW should also further its promotional strategies in regards to ‘ATL (above the line)’ and ‘BTL (below the line)’ marketing modes. ATL means aiming wider audience and also focusing on building the brand (Ryan 2016). BMW has been using it; however, there are always place for improvement not just for points that are yet to be covered but, it is rather because other brands have done it comparatively better. Hence, BMW needs to work on ATL to make an improved impact on customers.

BTL (below the line), on the other hand, is a different concept. This strategy is used to focus on specific audience who are categorized based on different factors that also involves communication as well. It enables audience to establish communication with the brand (Ryan 2016). BMW has been using the different BTL strategies like direct mail marketing, sponsorship, and others. However, improvements are required. This is for a fact that competitor companies have been following the same strategies. The real difference would be in how they execute the various types of promotional modes.

AIDA is a construction of four principles that contemporary companies follow. The four principles are Attention, Interest, Desire or Decision and Action. It is often believed that if any one of the four principles of AIDA is missed, this will produce serious destruction (Duffett 2017). BMW has been active in grabbing attention of both the mass and the specific audience. However, there is a continuous need for enhancing the capability of a firm which could offer superior interactive experience to its audience through attractive promotional strategies.

The next stage of AIDA is to hold the interest level of both the mass and the target audience. This can be done by accomplishing the commitment (Duffett 2017). BMW has been doing it effectively which is the reason they have been named the best brand for automobile manufacturing in 2012 (Elena 2016). However, the competition for the best crown will continue and for the reason, BMW will require not to only maintain the same streak, but to even move further with some additional skills.

Desire is the next principle of AIDA. Nevertheless, customers those who can afford it, have the desire to buy the different models of BMW. However, they will be needed to maintain the same expertise and to add more feathers in it. The last principle of AIDA is an action which means making up the sales (Elena 2016). BMW as a company has been able to leave an impact on its target audience; however, they need further strategies to be firmly positioned in the market.

Conclusion

To conclude, BMW is one of the few automobile companies which have successfully promoted its brand value at the global level. They have been using the CRM effectively; however, they should consider the few suggestions as described in the recommendation section. They have also been effective in using promotional techniques; however, there is a need to make a few improvement in the existing techniques, so that, competitiveness could be enhanced. Additionally, there are also the needs of adopting viral marketing for marketing communication which other automobile companies have considered.

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