You are the new marketing manager for a company (you decide which one you want to be as long as it is a real company NOT hypothetical). Your boss, Sally, the General Manager, has just left your office requesting that you review the segmentation of your product offering or product line with a view to increasing sales and profitability. The new BMW 7 series is not just any other automobile product line by BMW, it represents a philosophy by BMW "to redefine the world of driving pleasure" (appendix 2). BMW has re-modified its previous product line for the 7 series and has come up with a totally new BMW 7 series.
It promises great value and benefits to our customers whom merit class and social status significantly. The new 7 series targets a small section of the automobile market segment. This is why the price of the new 7 series is quite substantial. However customers of this new 7 series know what they are buying into, as the new 7 series simply represents class and style equipped with the latest technological advancements in automobile. The new BMW 7 series has clearly been positioned in the market as an automobile that delivers class and has massive advancements in technological features.The new BMW 7 series has a clear definition of customers whose needs and characteristic are met by this great automobile design and features.
To get greater sales and profits, we might need to attract more female customers to the new 7 series, as the 7 series has been traditionally seen to be as a male dominant automobile. With its new features of top-end technology in safety and drive features, the new 7 series can easily be position in a much more positive way to the mind and thinking of this group of female executives. BMW has long been regarded to be as one of the world's leaders in producing prestige and luxurious automobiles.To keep up these highly perceived standards of BMW by our customers and also to keep pace with our competitors we would have to continuously keep on improving and be creative.
With the rapid growth of the economic and the massive advancement of technologic happening around us, we can and have to build our products around our customers. BMW has to "vary widely in their abilities to serve different segments of the markets" and not simply compete in the "entire market" (Kotler, 2001:292). By doing so, the prestige name that has long been associated with BMW, would be greatly diminished.Taking for example an interview with Mr.
Singh, he said "for BMW to produce an automobile in the price range of a Hyundai Excel, would simply be a turn off for me. It would be an entire drop in class and status" (Singh, 2002:interview). Thus by simply not trying to compete in the entire marketplace and lowering its automobile prices to its competitors, what BMW has done and is doing is that it segments its customers very regimentally and identifies its "target market". BMW has to subsequently develop their "product positioning" and "marketing mix" to suit this segmented and targeted markets (Kotler, 2001:293).Thus BMW produces a very wide variety of prestige and luxurious automobiles to fit into a very comprehensive range of customers. BMW has produced a wide range of automobiles to suit the varies segments of the their target market, starting from the 3 series to the 7 series, BMW has also got the E46 320i Touring Wagon, which is tailored designed as the ideal touring family automobile.
BMW has also introduced a range of sporty models, like the Z3 and more recently the X5, for those customers who crave for that extra speed, power and sporty design in a prestige automobile (appendix 1).BMW's new 7 series target customers has been a fine example of a very well segmented and defined target market. BMW has simply adopted the strategy of "product modification" to their already existing product line of the old 7 series model (Kotler, 2001:293). The old BMW 7 series, which was gradually fading away in terms of "progressive technologic" and " simplicity for practical benefits" as seen by BMW was re-modified and subsequently introduced to the targeted market in order to boost sales and profits (appendix 2).While developing the new 7 series, BMW had taken the philosophy "to redefine the world of driving pleasure" (appendix 2). BMW had to look into their customer's needs and characteristics before taking up such a major step to modify their 7 series product line.
Like any other product, which fades over time, BMW had to change the 7 series "characteristics - such as products quality, features or style - to attract new users and usages" (Kotler, 2001:404). The BMW 7 series has a very well defined range of customers. Most do share the same characteristics for prestige automobiles that have surpassed quality and standards.Taking into account that the new BMW 7 series is priced in the range between $174100 to $223000, which is by no means a small amount, customers of BMW can also be defined as people whom have some substantial social status (www.
bmw. com. au). Typically the ranges of the BMW 7 series customers are senior executives, in the mid 30s to 50s, businessmen or wealthy men. They have similar passion and taste for automobile which defines their class and status and which would give them "sheer driving pleasure" (www.
bmw. com. au).These customers do have differences when it comes to what they want to see in an automobile, besides it simply being prestige and of social status. BMW has shaped its 7 series to subsequently meet all these various needs of their customers. The features, like the suspension technology and the onboard computer, installed in the new 7 series, would easily sway customers, whom crave for the latest technological advancement an automobile has to offer (appendix 3).
There are some whom crave for comfort and easy to use features in an automobile.The new 7 series which comprises of "all the innovations which supports the driver" has the "iDrive" which "subdivides these new features into two areas: drive features and comfort features" (appendix 2). This technologic really makes driving a breeze for customers and BMW has taken the steps to make their customer driving experiences "a pleasure to enjoy" (appendix 2). There is also the "ISIS" feature, which is "currently the most integrated safety system in the world" (appendix 2).BMW knows that customers of their new 7 series would only want the best safety system installed in their automobiles and have thus develop such a technologic that certainly be a competitive advantage over their competitors. The new BMW 7 series has clearly been positioned in the market as an automobile that delivers class and has massive technological features.
These features and enhancement has clearly help to "occupy a clear, distinctive and desirable place relative to competing products in the minds of target consumers" (Kotler, 2001:293).
