The BMW Company normally aims to attract both men and women who have a strong brand attachment to the automobile. psychological slicing BMW Buyers are divided into many groups according to their socioeconomic class, personality, and attitudes through psychographic segmentation.
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Targeting and Segmentation BMW success story BMW developed a video marketing campaign in 2001 that wasn’t directed at any of its client groups. It wasn’t aimed at BMW customers; rather, it was another market segment. Learn who BMW actually targeted.
One of the best stories that marketers look up to is the BMW Market Segmentation narrative. And the reason for that is that BMW was able to simultaneously target several market segments.
The fact that BMW has a perfect understanding of segmentation is more significant in the success story of market segmentation for the company.
But BMW does understand segmentation in a way that most other businesses definitely don’t. And that is the evident truth that a section is not a collection of individuals.
Therefore, if a particular group of people meets that condition today, then another group of people will meet that criteria the following day.
Do you want to know how this concept for targeting and positioning is used by the BMW market segmentation to build a success story?
Then keep reading because I’ll be sharing with you the 2001 BMW segmentation and targeting success story that resulted in a successful advertising campaign.
BMW Targeting, Segmentation, and Positioning
BMW The company’s marketing initiatives can be based on segmentation, targeting, and positioning. BMW, just like any other firm, must categorize the population using a set of specified criteria and provide goods and services that are particularly appealing to this particular demographic. Segmentation, targeting, and positioning are terms used to describe this marketing strategy. Businesses cannot offer goods and services that are appealing to all segments of the public equally, so segmentation, targeting, and positioning are crucial. The term “segmentation” refers to the division of potential customers into various categories based on a variety of factors, including age, social status, lifestyle, etc. Demographic, behavioral, psychographic, and geographic segmentation are the four categories.
Targeting, which comes after segmentation, involves choosing a specific group or groups as a target client segment. The final step in segmentation, targeting, and positioning is positioning, which is choosing the marketing mix that is most pertinent to the specified target consumer segment.
BMW Group has a mono-segment positioning strategy, and as a result, the corporation appeals to a single consumer category. In other words, the corporation does not offer affordable vehicles to market to people and households with a smaller budget. Instead, the BMW Group’s product line primarily consists of pricey vehicles at a premium level.
The segmentation, targeting, and positioning used by BMW are shown in the following table:
It must be recognized that the segmentation, targeting, and positioning for BMW as shown in the above table are carried out broadly, without recognizing distinctions between different models of a single brand. Every brand within the BMW Group is capable of additional segmentation, targeting, and positioning.
For instance, the aforementioned chart classifies the MINI target customer segment as 25–45 year old males and females who are part of Full Nest 1 (married couple with youngest child under six) and who have a high level of attachment to the brand’s cars but who do not currently use MINI products. However, particular MINI models, such as the MINI Roadster, MINI Clubman, and MINI John Cooper Works, have been created for certain market groups.
The BMW Group Report is a thorough examination of the company’s marketing and business strategies. The paper uses the BMW Group as an example to show how to apply the most important analytical strategic frameworks used in business research, including SWOT, PESTEL, Porter’s Five Forces, Value Chain analysis, and the McKinsey 7S Model. The report also examines the leadership and organizational structure of the BMW Group and covers topics related to corporate social responsibility.
Segmenting consumers
BMW typically appeals to a single consumer segment of very affluent people with a mono-segment marketing strategy. The majority of BMW’s vehicle inventory is made up of luxury cars, and even the entry-level Series 1 is priced greater than other mid-range sedans. Budget vehicles that would appeal to people and households with incomes below the upper middle class are simply not offered by the corporation. Even so, it’s likely that BMW employs a post-hoc segmentation strategy, analyzing marketing data after sales to identify its consumer groups and category management. Based on consumer preferences, segmentation includes product appraisal.
This comprises characteristics of an automobile such its cost, performance, ecological attributes, and dependability. These aid in forming the selection criteria for automobiles. The additive value function, which is a key means of calculating utility for various client segments, must take preferences into account when building it (Liu, Liao, Huang, & Liao, 2018).
As was indicated in the case study, BMW offers a range of vehicles that can satisfy the various requirements of its customers. It has a number of vehicles in each of the automobile classes it offers, such as sedans, SUVs, and roadsters, all of which gradually increase in price and feature offering. By balancing consumer behavior with the marketing mix and responding effectively to value and consumer trends, BMW genuinely segments the premium market. The company adopts a marketing approach that primarily targets a premium target market, but it does not compromise and serves the majority of market groups (Yuying & Qingrun, 2018).
Men between the ages of 30 and 50 who make more money are the main buyers of BMW automobiles. BMW is able to preserve its position as a luxury car manufacturer thanks to this segmentation. BMW sets itself to cater to upper-class clients who will value the artistic and symbolic nature of its highly technical automobiles by combining luxury superiority with performance and reliability. As a result, BMW assigns a specific value to its products, which is represented in both the pricing and the marketing plan.
Case Study of BMW
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What marketing tactics does BMW use well to reach each segment group and where may it make improvements?
Instead of merely producing 1 Series vehicles, BMW can also produce more elaborate vehicles at lower prices for the “modern mainstream” group market. Therefore, this category of customers will have additional options, and this may also draw in new customers who have never driven a BMW. BMW built their vehicles with superior engines for incredible performance.
Instead of merely 1 Series automobiles, BMW can also produce more elaborate vehicles at lower prices for the “modern mainstream” group market. Therefore, BMW created their cars with superior engines for fantastic performance despite this segment of customers who never use BMW automobiles.
How does BMW promote its goods?
BMW offers cooperative advertising initiatives to their regional dealerships as a rapid way to increase brand equity. Brands can provide store-level marketers with access to more sophisticated media placements by splitting some of the advertising expenses with their dealers. Dealers may expand their advertising presence across print and digital platforms thanks to these cooperative partnerships without having to pay astronomical charges on their own. Dealers are more likely to return and conduct business with the brand in the future if they feel the company is supporting them and assisting them in selling the products they have on the lot.
How devoted are BMW clients?
The study, now in its second year, determines if an owner purchased the same brand after trading in an old car for a new one using data from the Power Information Network. The proportion of car owners who stick with the same brand when they trade in or buy their next car determines customer loyalty.
With a 48% loyalty rate, Lexus continues to lead the pack among premium brands. Following in order are BMW (45.1%), Porsche (44.9%), Audi (43.4%), and Mercedes-Benz (47.8%).
With a 60.5% loyalty rate, Subaru ranks first overall in the automobile sector, first among mass market brands, and first among mass market brands. Honda comes in second (60.3%), Toyota is third (57.3%), RAM is fourth (57.3%), and Ford is fifth (54.3%).
Calculations for the 2020 U.S. Automotive Brand Loyalty Study are based on trade-in data from June 2019 to May 2020 and cover all model years.
BMW’s use of direct marketing
BMW is no stranger to utilizing cutting-edge technology to attract clients who value luxury. To reach the brand’s desired demographic groups, carefully planned television and radio spots are combined with targeted internet ads, email campaigns, and a fully functional website. BMW has added an older technique to the mix by distributing a number of glossy photo-adorned direct mail postcards to consumers’ homes. These postcards cut through the typical marketing clutter to capture potential buyers in a calm, personal moment since they are made of a durable, practically indestructible substance.
Television and radio shows are regarded as entertainment, and viewers and listeners naturally use the downtime while commercials play to complete quick tasks or divert their attention elsewhere in order to avoid missing any of their programming. Similar to this, sidebar online advertising vanishes into the background, and spam filters prevent many marketing communications from effectively reaching the target customer. On the other hand, direct mail postcards like BMW’s penetrate consumer attention and support other marketing initiatives through a tangible object, making an impression on their own while also enhancing the message of brushed-off spots in other media.
Courtney Albert, a management consultant at Parker Avery Group in Atlanta, provided her perspective on the campaign’s strategy in an essay for Luxury Daily. Here are a few of our favorite passages from it:
Instead of sending them to the main BWM Web site or relying on them to find the closest location, the printed mailer can be used locally to drive traffic to specific dealerships.
“A consumer typically has to engage with a promotion or campaign more than once.”
Another advantage that direct mail provides to advertisers is that BMW uses both sides of their postcards to emphasize various features of their BMW 3 Series cars. Double-sided postcards are able to display two quite diverse feature sets in one imprint, but the extent of what is contained in an advertisement is typically limited to a single theme for the sake of cohesiveness. BMW’s postcard campaign is a case study in effective and targeted advertising, including photo collages, marketing language, and individualized calls to action that direct customers to a nearby dealership.
Leading the pack in consumer interest is difficult, even for a luxury brand like BMW. Their creative approach to promoting the characteristics of their BMW 3 Series may be seen in their use of direct mail postcard campaigns to contact buyers. BMW’s sturdy direct mail postcards capture consumers’ attention with glances from unexpected locations, even days after they first arrive, serving as a covert reminder of the beauty and grace of their product. BMW continues to pioneer luxury vehicle advertising, which is not surprising given their thoughtful direct mail marketing strategies.
How does BMW interact with its clients?
In order to communicate its marketing message to the representatives of the target customer segment, BMW Group employs a variety of components of the marketing communication mix, such as print and media advertising, sales promotions, events and experiences, public relations, and direct marketing in an integrated manner. The marketing strategy for the BMW Group focuses on the innovative features and high level of digitalization of its automobiles. According to the graph below, the BMW Group spent USD 291.4 million on advertising in 2014, a modest increase from the prior years.
What are the market dynamics of BMWS?
What type of market structure does BMW fit into? The automobile industry includes BMW. BMW is a participant in a market with monopolistic competition due to the high number of rivals it faces and the relative lack of influence the company has over the automotive sector.