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STUDY ON BMW PREMIUM

SELECTION
A Summer training project report
submitted in partial fulfilment of the requirements for the
award of degree of MBA MARKETING AND FINANCE

2014 2016

Submitted by
(internal guide)

guided by

Certificate of Originality
This is to certify that the project report entitled STUDY
ON BMW PREMIUM SELECTION submitted to
bharati vidyapeeth
deemed university . Pune in partial fulfilment of the
requirement for the reward of the degree of MBA
MARKETING AND FINANCE is an original work
carried out by MR. work carried out by MR. GAURAV
BAJAJ UNDER THE GUIDANCE OF MR. GAUTAM
GANDHI . The matter embodied in this project is a
genuine work done by Gaurav Bajaj to the best of my
knowledge and belief and has not been submitted before
neither to this university nor to any any other university
for the fulfilment of the requirement of any course of
study

Signature of student
designation

signature of the guide

CERTIFICATE
This is to certify that the project titled STUDY ON BMW
PREMIUM SELECTION is done by GAURAV BAJAJ
submitted in partial fulfilment of the requirement for the
award of degree of MBA MARKETING AND FINANCE
from bharati vidyapeeth deemed university , pune. It has
been completed under the guidance of from bharati
vidyapeeth deemed university , pune. It has been
completed under the guidance of MR.YOGESH GURAV
AND MR/MS. ________________ (CORPORATE
MENTOR) .WE are thankful to BMW for having allowed
our student to undergo project work training . the
authenticity of the project work will be examined by the
viva examiner which include data verification , checking
duplicity of information etc . and it may be rejected due to
non fulfilment of quality standards set by the institute

DR. SACHIN S. VERNEKAR

(DIRECTOR IMED)

ACKNOWLEDGEMENT

Acknowledgement is an art, one can write glib stanzas

without meaning a word, on the other hand one can make a
simple expression of gratitude

I take this opportunity to acknowledge my institution

BHARATI VIDYPEETH DEEMED UNIVERSITY where I
am pursuing my post graduation in marketing . I would also
like to express my thanks to Mr YOGESH GURAV , Internal
Project Guide, for his guidance, support and encouragement
which helped me in completing my project.

GAURAV BAJAJ
ROLL NO .23

PREFACE
As a part of the MBA curriculum and in order to
gain practical knowledge in the field of
management , we require to make a report on
study on bmw premium selection . The basic
objective behind this project report is to gain
knowledge about bmw premium selection cars

TABLE

OF

CONTENTS

TITLE OF PROJECT.............................................................................................................. i
CERTIFICATE OF ORIGINALITY....................................................................................iii
CERTIFICATE....................................................................................................................... iv
ACKNOWLEDGEMENT.......................................................................................................v
TABLE OF CONTENTS........................................................................................................vi
LIST OF TABLES...................................................................................................................ix
LIST OF FIGURES.................................................................................................................x
LIST OF ACRONYMS...........................................................................................................xi
ABSTRACT...........................................................................................................................xii

CHAPTER 1.............................................................................................................................1
1.0 Introduction........................................................................................................................1
1.0.1 PRODUCTION AND TECHNOLOGY..........................................................................
1.0.2 COOPERATION NETWORK .....................................................................................
1.1 Background of the study......................................................................................................
1.2 Statement of the problem.....................................................................................................3
1.3 Purpose of the Study............................................................................................................4
1.4 Objectives of the study.........................................................................................................4
1.5 Research questions...............................................................................................................4
1.6 Scope of the study................................................................................................................5
1.6.1 Geographical scope...........................................................................................................5
1.6.2 Time scope........................................................................................................................5
1.7 Significance of the study......................................................................................................5

OVERVIEW OF A INDUSTRY AS A
WHOLE
A traditional company with a long history.
Initially, BMW Company was dedicated to the
development and production of airplane
engines. BMWs blue and white logo still
represents a whirling propeller which records
the companys history. In 1923, the first BMW
motor car was released. Five years later in
1928, BMW acquired Eisenach car factory
and started producing cars. Since then, BMW
has been putting into market many excellent
works of car manufacturing history. These
products continuously inspired peoples strong
feelings and aspirations, and built out BMW
Companys outstanding fame as a car
manufacturer.

Production and technology

Just like BMW staff doing teamwork,
inside BMW Group, each plant also
cooperates a lot within a collective
production system. Meanwhile, BMW
adopts a flexible management method
through which each plant arranges
staff flexibly based upon different car
models and through which all plants
stand out for flexible working hours
and flexible resource management. As
a result, BMW Groups highly
cooperative production network can
not only manage the extremely
complicated craft process in cars
production, but also stay responsive to

technological changes of demands of a

certain car model.

Cooperation network
Apart from developing and optimizing
resources inside the group, BMW
Group has also made good use of
resources outside the group in a
cooperative way. BMW Group pays
high attention to its network to be more
flexible and agile. In accordance with
the success code of individual effort
accumulates while teamwork doubles
the outcome, BMW Group has
consistently pursued the long term
cooperation with partners. That
involves traditional parts suppliers, as
well as small yet strong hi-tech
companies, scientific labs and
colleagues in relevant technology field.

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International sales network

BMW cars are sold around the globe:
Since the 1970s, BMW Group has
been pursuing to set up its own sales
company in every important markets
on the globe. Today its sales network covering over 120 countries in five
continents - is made up by 27 sales
companies and 3,200 independent
agents. Markets with low sales rate are
served by specifying importers. The
strategic objective is to pursue
development in Asia, whose sales will
be to near that of Germany, Western
Europe and the US in the long run.

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Environmental protection and social

responsibility
In order to ensure a sustainable traffic
development, BMW Group has made
relentless efforts and many innovative
contributions. Apart from developing
intelligent and ecological traffic
management system for traffic bustling
urban areas, BMW Group is also
dedicated to develop replaceable
dynamic system. In this regard, BMW
Group emphasizes Clean Energy, to
obtain liquid hydrogen from other
renewable energy sources and use
liquid hydrogen as clean fuel to drive
cars.

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Working for BMW Group

BMW Group regards employees as a
major element to gain success as well
as an important guarantee for success
worldwide. Its the companys
employees who turned BMW Groups
successful stories into reality.
Therefore, BMW Group also embraces
sustainable development principles in
terms of human resources and
integrates them into companys
management philosophy.

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BMW Motorsport
Since a long time ago BMW Group has
been proving its strength in sports
events and set up many records. In
1937, a BMW motor car broke motor
cars MPH record with a speed of
279.5km per hour, which remained as
a world record for 14 years. In 1940, in
the famous Italian Mille Miglia event,
legendary BMW 328 won the
champion for all-class games. From
1973 to 1979, BMW won the
champions of European Touring Car
Championship six times. In 1983,
BMW won the champion of Formula 1
games. BMWs sports success
continued to today.

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BMW Groups development in

China
In order to its successful development
in Chinese market, BMW Group and
Brilliance China Auto Ltd. together
submitted the program proposal for
setting up a Chinese and foreign joint
venture in December 2001. 2003, the
joint venture Brilliance BMW started its
operation officially.
On May 20, 2004, BMW Group and
Brilliance China Auto Ltd celebrated
the official inauguration for their joint
ventures plant in Shenyang, capital
city of Liaoning Province.

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Methodology
In this report just secondary data will be
used; collected from BMW annual reports,
automotive related website, and market
analysis. Some marketing tool such as
PEST analysis, SWOT analysis, Bell curve
and Boston matrix model will be used to
analyze the company and some of its
products.
Findings
Competitor analysis
The German automaker experienced a
steady increase in sales in the last few
years, as it has always been able to respond
to the attacks of its competitors with an
increasing level of technology and
innovation that characterizes its products,
thanks to important investments in R&D.
The design is also a fundamental and
integrant part of the competitive advantage
of BMW, despite the critics to the ex chief

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of design Chris Bangle (Wired, 2009). As

far as competitors concern, the BMW has
always faced the competition of the
compatriots manufacturers such as:
Mercedes, Audi, and Porsche which
benefit from a similar brand-reputation and
price range, but also from overseas brands
brand such as Lexus and Toyota. It is
important to consider that BMW Group
has two other brands in its product range
moving from the premium sector of MINI
to the luxury one of Rolls Royce, which
would imply also a different range of
competitors. The automotive sector is a
fast moving sector, and the competitive
advantage is not immune to this type of
environment; for this reason BMW cannot
count on temporary advantages over
competitors but should always aim to
improve their competences(Man gold,
2012).

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Environment analysis
The main purpose of the environment
analysis is to identify and evaluate the
future prospective of the company and its
relations with the external environment.
PEST analysis will be used analsing
political, economical ,social, and
technological factors, which affect the
macro-environment of BMW. As far as
political factors concern, laws and
regulation are strongly affecting the
automotive sector; increasing restriction
aimed to the environment preservation and
pollution abatement are being applied
,especially in the European countries, with
a major impact on automobile
manufacturers, and BMW (Bmw group,
2010). Economic growth on certain
countries and a strong economical crises of
others are the two variables which strongly

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affect the automotive sector; as mentioned

before BRIC countries are experiencing
growth with a resulting increasing buying
power which would affect positively the
sector, but at the same time an economic
downturn in the US is generating
unpleasant consequences. Demographic
and cultural changes are usually the ones,
which affect the social factors in the
analysis. In the automobile sector seems
evident a change in the customer choice; as
a matter of fact fuel efficiency and low
emission are becoming more and more
important in the car choosing process
(Gstatic,2011), also guided by the
economic recession in mature markets
.Technologically, there is a really
important trend, which sees R&D taking a
crucial role; increasing technology with the
aims to gain competitive advantages are
widely applied from automobile
manufacturers and BMW, in some cases
technology is also being used to regain the

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decreased margins of the industry (Auto

evolution, 2011).
Internal analysis
As mentioned Before, BMW operates 24
manufacturing facilities in 13different
countries; most of the manufacturing sites
are owned by the company, representing
significant assets for the group (BMW AR,
2012).
Holding three different premium brands
the group is not able to generate the same
economies of scale of the competitors;
significant investment in R & Dare in fact
hard to be recovered. Despite this, R&D
represents one of the main competitive
advantages of the company; being able to
produce unexpected news BMW has
always been able to anticipate and respond
to the rapid changes in the market. BMW

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also has important strategic alliances with

Alfa Romeo, which make the company
able to benefit from cost savings and
economies of scale resulting by common
development and some of the
manufacturing process. The Strategy of
BMW is called number one strategy an
has been introduced after the economic
crises in 2007; this particular strategy is
focusing on soft issue more than key
numbers and aims to the employees
satisfaction and the sustainability in the
value chain

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Growth strategy
BMW is already experiencing growth
increasing by 4.4 per cent compared
to2011 and reaching 5.1 billion euros and
11.7 per cent higher revenues to
76.8billion euros (Business Inquirer,
2013). It has also been nominated
manufacturer of the year for the year 2012
and the outlook seems positive for2013
(Business car, 2013). Despite all this, as
mentioned in the SWOT analysis the
company is still suffering form high risk of
the currency exchange rate and from high
barriers to entry in certain market such as
Brazil. Being
involved in the international markets and
generating the 51 per cent of its revenues
from markets outside the Europe, BMW is
widely exposed to the exchange rate risk
which can affect the values of the
companys equity. Another fundamental

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factor that is suggesting the construction of

production facilities out of the European
continent, concern the possibility of being
more profitable in a key market for future
growth such as Brazil. According with
Frontier Strategy estimates, the average
margin on Latin America is 10.5 per cent
while in Brazil is 5.3 per cent; this happen
because the government is raising barriers
to entry for overseas company applying an
average corporate tax of69 per cent of
profits (Frontier strategy group, 2012). The
government is strongly discouraging the
importation of goods but at the same time
give the same protection given to the
Brazilian ones for those who decide to set
up plants locally (Financial Times, 2012);
this could be a really profitable
opportunity for BMW in order to expand
in such rich market and gain a strong
competitive advantage on the competitors.

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Selection of competitive advantage

As far as competitive advantage is
concerned BMW has always structured its
competitive advantage based on R&D and
technological development. This would be
a good strategy to keep the company in the
right direction, enabling it to anticipate and
lead the market, coming up with
innovative products be fore the
competitors. This strategy already find
application in BMW and is name das
Number One strategy (Bmw education,
2012) In order to maintain this competitive
edge would be also important to
structuring a plan for the introduction of
new products; guiding them from the
introduction stage to the growth stage,
finishing with the maturity and decline
stage. Particular attention would have to be

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based on interleaving successfully growing

products with
the mature ones to never have too many
mature products without a potential
substitute in growth.
Marketing mix program .
A.Product
The product is probably the cornerstone of
BMW marketing mix program ,
characterized by a high technological
content it is definitely the main strength of
the company. In order to reach the
objectives it is important to expand the
range of products already very wide
targeting the entry-level segment
expanding the line and developing more
eco-friendly products such as hybrid
luxury cars and compact city cars designed
to the middle market.
b. Price

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Price for BMW should continue to be a

consequence for the differentiation
strategy; innovation, design and quality
have a price. The brand should not lower
the prices for premium and high-ended
products despite the recent crises in some
of the markets. At the same time should
differentiate the price for entry-level
product by creating special offers aimed at
mid-market.
c. Place
Exclusivity of the store is definitely a
factor to leveraged on for BMW; the
company should continue to invest in the
creation of flagship stores, so as to
maximize the consumer experience. At the
same time should also focus expanding the
amount of authorized dealers, which are
already present in more than 100 countries
with more than 4.400 stores ( Bmw group,
2012).

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d. Promotion
BMW is very committed in the promotion
of its products, the company in fact invest
large amount of money in product
placement in movies such as The World
Is Not Enough and others. New
advertising techniques are largely used by
the brand to enhance the design and quality
of its products, however could probably be
profitable for the company to focus on the
environmental sustainability of its future
products. In order to create awareness in
the BRIC countries BMW should apply
principles of global marketing to its
advertisements, in order to shape them
according to the countys culture.

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A name. A philosophy.
BMW Premium Selection - preowned vehicles
Setting the standard for fast, troublefree purchase of a pre-owned BMW:
the BMW Premium Selection certificate
offers an exclusive choice of BMW
vehicles and first-class service. Every
BMW Premium Selection vehicle
meets quality-oriented product
standards, ensuring that it satisfies the
most demanding driver. In addition,
BMW Premium Selection vehicles are
covered by a comprehensive BMW
vehicle service programme and
warranties.

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BENEFITS OF BPS
1. CERTIFIED VEHICLE HISTORY
Only the best - thats what the BMW
Premium Selection delivers. Only the highestquality vehicles with proven technical
superiority make the grade and become a part
of this exclusive range of pre-owned vehicles.
Each vehicle must first undergo a range of
tests performed by factory-trained technicians
and fulfil exacting national standards
regarding the age and mileage of the vehicle.
BMW also guarantees each driver a complete
service history.
2. WARRANTY
The BMW Premium Selection
programme offers national warranties
with terms and conditions that can
compete with those of new vehicles.
Being a BMW owner means expecting
the highest levels of quality and service.
A complete warranty on all mechanical

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and electronic vehicle parts ensures that

you can enjoy life as a worry-free BMW
driver for a long time to come.

3. VEHICLE EXCHANGE
Quality is our promise and we are completely
confident in the quality of the BMW pre-owned
vehicles. In the unlikely event that a
demonstrable fault arises (with a defined
period) and we are unable to resolve it, you
are entitled to visit your BMW Premium
Selection partner for a full exchange*. Your
satisfaction is guaranteed: you can take our
word on that.
*The exchange policy differs from country to
country.

4. ROADSIDE ASSISTANCE

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Mobile Service from BMW.

The mobile services reward you with the
security and peace of mind that comes with
driving a BMW. At home or abroad, our
qualified mechanics and service personnel
are at your side should you ever need
roadside mechanical help or emergency
towing.

chapter

:RESEARCH

METHODOLOGY

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OBJECTIVES

AND

SCOPE

OF

STUDY

OBJECTIVES
:
To study the bmw premium selection as whole . BMW
offers pre owned cars to customers so that they can buy
BMW
at
low
price
.
SCOPE
1.6 Scope of the study
1.6.1 Subject scope
The study BMW PREMIUM SELECTION as WHOLE

1.6.2 Geographical scope

The study was conducted in Faridabad ,harayana located on Mathura road

1.6.3 Time scope

The study was done in a period of 2 months between May and June 2014

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Conclusions

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BMW is emerging as one of the most important automobile

manufacturer in the world; through investments in R&D and
in the emerging markets is succeeding in finding a way out of
the European debt crisis. However, as shown previously the
company must stay focused accumulate a significant
competitive advantage on the competitors, aiming at
achieving leadership in the emerging markets, through correct
positioning, and new environmentally sustainable products.

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Bibliography
www.bmw.in
www.bmw-bavariamotors.in
www.bmwgroup.com/
www.bmwmotorcycles.com/

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