BMW Marketing Case Analysis Essay Example

Accuracy, Infinite, and Lexus had lower prices than BMW. However, BMW couldn't simply lower their prices for existing customers. This led Grinner to search for new pricing ideas that would adapt to the changing market environment and align with consumer's value-oriented buying behaviors.

The third issue involved BMW dealerships, which played a crucial role in the company's success. In Germany, all 800 dealers exclusively sold BMW vehicles. In contrast, only one-third of the 354 U.S.-based BMW dealerships exclusively sold BMW cars. The attitude of these dealers towards the manufacturer greatly influenced sales volume. If they didn't provide satisfactory service to customers, those customers were likely to turn to other auto brands since dealers served as a key point of contact for them. This explains why roughly half of BMW's U.S. dealerships sold fewer than 100 BMW cars in 1991.

To regain its leading position in the U.S. market, Karl Grinner realized that an integrative strategy was necessary and implemented "BMW---The Smart Choice" as their new strategy choice.Firstly,the focus shifted more towards providing consumers with a personalized experienceCompared to Lexus, BMW's focus is on being the Ultimate Driving Machine, which means their cars aim to enhance the driver's skills. In contrast, Lexus prioritizes providing extremely comfortable driving conditions but controls the consumer's driving experience. To address this, BMW introduced the Better-car/Better-Driver concept to consumers, encouraging them to not only consider reliability, fuel efficiency, and comfort but also prioritize the overall driving experience (as seen in Exhibit 1 where this approach strongly appeals to younger buyers who have significant purchasing power).

In terms of pricing strategy, Grinner took into account the composition of their product line and considered the "price

ladder." To tackle pricing/value concerns in the U.S., BMW introduced lower-priced models. The introduction of a new product offering priced at $19,900 makes it the most affordable among all BMW cars available in the U.S. Additionally, while featuring all-new engines, prices for models such as 325 and 740 are only slightly higher (6% and 2%, respectively) than their predecessors'.

Furthermore, to improve customer service satisfaction levels,BMW implemented three steps aimed at reforming its dealership network. Firstly,a team of area managers was appointed to oversee each dealer and assist them in enhancing performance. Secondly,the Dealer Operating System was created by BMW to ensure consistent regulations throughout car sales processes and services provided at dealerships.Additionally,a bonus system was implemented for dealers who achieved high sales volumes while maintaining excellent levels of customer satisfaction.BMW focused on strengthening its exclusive dealer network by emphasizing that dealers should only sell BMW vehicles. This approach helped BMW improve its "Customer Care" programs by closely regulating the dealership network. The overarching goal was to establish a high-quality franchise that prioritized customer satisfaction and offered prestige, enjoyment, and excitement. Additionally, BMW aimed to build trust among customers and ensure that investing in their vehicles was a wise choice.